Political Econ of Growth. Paul A. Baran

the name is possible in a society in which the means of production remain under the control of private interests which administer them with a view to their owners’ maximum profits (or security or other private advantage). For it is of the very essence of comprehensive planning for economic development—what renders it, indeed, indispensable—that the pattern of allocation and utilization of resources which it must impose if it is to accomplish its purpose, is necessarily different from the pattern prevailing under the status quo. Since, however, the prevailing pattern of resource allocation and utilization corresponds, at least approximately, to the best interests of the dominant class, it is inevitable that any serious planning endeavor should come into sharp conflict with that dominant class and its allies at home and abroad. This conflict can be resolved in one of three ways : the Planning Board, if one is created by a capitalist government, can be taken over—like the government itself—by the dominant interests, its activities turned into a sham, and its existence used to nurture the illusion in the underlying population that “something constructive is being done” about economic development. The second possibility is that the Planning Board established by a reform government remains more or less impervious to the influences, pressures, and bribes of powerful interests, is staffed by honest reformers who believe in the independence and omnipotence of the state in the capitalist society and set out to introduce far-reaching changes in the national economy. In that case the Board is bound to run into tenacious resistance and sabotage on the part of the ruling class, achieves very little if anything, and ends up in a state of frustration and impotence with the fatal by-product of discrediting the very idea of planning in the eyes of large strata of the population. The third alternative is that planning becomes the battle cry of a broad popular movement, is fought for relentlessly against the entrenched beneficiaries of the ancien régime, and is turned into the basic organizational principle of the economy by a victorious social revolution sweeping aside the former ruling class together with the institution of private property in the means of production on which its very existence rests.

      It may be objected that all this may well be true if the fundamental premise is granted: that what is needed is rapid economic development. But why the hurry? Why this “obsession” with economic growth, to use an expression of a recent writer on the Soviet economy? The mere asking of these questions reflects the intellectual distance of Western observers from the living conditions in the underdeveloped countries and the mood of the people who have to endure them. Ours is an age in which misery, starvation, and disease are no longer accepted as ineluctable fate, and ours is the century in which socialist construction has moved from the realm of theory into the realm of practice. The peoples of the backward areas now know that economic and social progress can be organized, given the will, determination, and courage to declare a war against underdevelopment and given the unbreakable resolution to wage that war in the face of the most ruthless resistance on the part of domestic and foreign exploiters.

      IV

      From such historical experience as we have, it is abundantly clear that the struggle is protracted, hard, and cruel. The victory of the social revolution, although decisive, is merely a success “in the first round.” The establishment of the capitalist mode of production and of bourgeois rule, where it was fully attained, took centuries of cataclysmic developments. It can hardly be expected, even in our much faster moving time, that the greatest social transformation of all—the abolition of private property in the means of production and therefore of exploitation of man by man—should be fully achieved within a few short decades. It is quite understandable that to many the ascent appears sometimes to be prohibitively steep and the uphill movement hopelessly difficult. Since it is impossible to attempt here a comprehensive analysis of the hurdles and problems encountered in the process of socialist construction, I shall limit myself to a few brief remarks on some areas where the roadblocks have been particularly conspicuous in the recent past.

      First and foremost among them is the international arena where social revolutions, regardless of where and how they unfold, meet with the implacable hostility of the ruling class of the United States—the most powerful citadel of reaction in the world today. No regime is too corrupt, no government too criminally negligent of the vital interests of its people, no dictatorship too retrograde and cruel to be denied the economic, military, and moral support of the leading power of the “free world”—as long as it proves its allegiance to the anti-socialist Holy Alliance. At the same time, no popular movement, however inclusive and however heroic, no socialist government, however democratically elected and however dedicated to the advancement of its people, can count on as much as non-intervention on the part of those who never tire of hypocritical professions of their devotion to social progress and to the democratic process. The unabating aggressiveness of the imperialist powers—large and small—immeasurably obstructs the economic and social progress in the countries which have entered the road of socialist construction.²⁸ Looking at the matter in purely economic terms and considering the burden of defense expenditures imposed on the socialist countries by the ever-present threat of imperialist aggression, it is obvious how large the costs are that the nascent socialist societies are forced by their class enemy to bear.²⁹

      The massive diversion of resources from investment, residential construction, and production of consumer goods that is necessitated by the maintenance of the indispensable defense establishment, slows down the rates of economic growth of the socialist countries, prevents a more rapid increase in the living standards of their peoples, and creates and recreates frictions and bottlenecks in their economies. This heavy load will have to be carried by the socialist societies as long as the threat of imperialism exists; its burden will not decline until the socialist economies have grown—in spite of it—so strong as to greatly reduce its relative weight.

      The second area in which the difficulties of the socialist countries have been most marked is that of agricultural production. There the sources of trouble are manifold. The process of industrialization, accompanied of necessity by a population shift from rural to urban areas, and the maintenance of a military establishment which eats but does not produce, have significantly raised the aggregate demand for food and other products of agriculture. This increase of demand has been, on the whole, nowhere accompanied by a sufficient expansion of supply. This is primarily due to the fact that while in countries with considerable underemployment in the villages, the productivity per man at work could be raised relatively fast, the increase of productivity per acre has proved to be an extremely slow process. Thus what might be called the mechanical revolution in agriculture brought about by the introduction of electricity, tractors, combines, and the like accomplished its purpose by freeing millions of peasants for nonagricultural employment; it did not lead to the spectacular increases of agricultural output per acre of land that was expected by many economic theorists—Marxist and non-Marxist alike. The increase of productivity per acre depends apparently much more than was anticipated on the chemical revolution in agriculture: on the application of synthetic and other fertilizers, on seed selection, the adoption of improved methods of livestock breeding, and so forth. This is, inevitably, a slow process: 2 to 3 percent increases of output per acre per year are considered by agronomists to constitute a respectable performance. The achievement of such a rate of growth is predicated on the availability of the necessary supplies (fertilizers, choice seeds, breeding animals, etc.), but also on the skill, diligence, and patience of the cultivators.³⁰

      This in turn points to another complication which has arisen in the Soviet Union as well as in other industrializing socialist countries. It stems from the fact that the industrialization of an agricultural country, particularly in its early phases, involves quite naturally the “glamorization” of industrial work, its acquiring greatly enhanced prestige and attractiveness. Large new industrial plants, tremendous power developments revolutionizing the lives of entire regions, thrilling technological achievements move into the center of national (and international) attention, become objects of intense—and justified—pride, and are allotted a preponderant proportion of publicity, of the government’s political and organizational effort, and of scarce administrative and scientific talent. By comparison, the plodding day-to-day drudgery of agricultural work recedes into the gray and dull background of social existence. A young man or woman of ambition, ability, and energy no longer wishes to remain “stuck in the mud” of the agricultural backwaters, to stay confined