Even without the CIA discoveries, everyone knows that the Soviet people live a lot worse than Americans. And the question that the CIA study tries to answer — precisely how much worse? — may appear to be not significant. If the USSR were just a little behind, placing the Soviet standard of living somewhat in the range of France, then the question might look different. But the lag is so great that being more precise about its extent does not seem necessary.
The concept of standard of living itself must be defined first — a lot depends on one’s point of view, on a country’s cultural traditions — no objective truth exists here.1 Clearly this standard is largely determined by the quantity and quality of food, clothing, various services, and by the size and comfort of housing. But it is somewhat less clear with respect to entertainment and sport — recreation in general. Rejuvenating relaxation is an important element of the standard of living, but without a concrete statement of what it is, one might conclude that the unemployed live better than everyone else.2 Therefore, the assumption is made that entertainment, sport, and recreation can be measured by expenditures on them, i.e., other things being equal, the more we spend for these pursuits, the better we live. Including health and education in the standard of living is no less questionable,3 but it is intuitively clear that, again, other things being equal, by spending more on universities, schools, and hospitals, people live better. Be that as it may, all these are components of consumption, and it is the total expenditures for consumption that characterises the standard of living.
The authors’ main difficulty in the concrete utilisation of the methodology described in the CIA study was, of course, the struggle with Soviet statistics — sparse, fragmented, unexplained, unreliable, and sometimes deliberately distorted. In addition to everything else, its various classifications do not correspond to those employed in the West. Although it complicated their work, the authors strived to follow Western classifications in order to ensure the international comparability of their results.
Briefly about the major conclusions: The study starts with a reminder that about 20 years ago the CPSU promised to provide ‘the highest living standard in the world by 1980’. In October 1961, the Twenty-Second Party Congress adopted a new programme which stated: ‘the CPSU poses a task of worldwide historical significance — to provide the highest standard of living in the USSR compared with any country of capitalism’.1 Although the text does not speak precisely of 1980, other parts of the programme and also Khrushchev’s speech presenting the programme to the Congress leave no doubt here.2 The CIA study says (v–vi):
Events have turned out quite differently. Real per capita consumption in the USSR currently is less than a third of that in the United States. The gap was narrowed in the 1960s, but began to widen in the 1970s. The Soviets also lag far behind the major West European countries and Japan, and except for the United Kingdom, the differences have increased considerably since 1960 … Over the past 20 years, the Soviets have made the most progress in ‘catching up’ in food, soft goods, and durables, but have retrogressed relative to the United States in housing, recreation, education, and health … We estimate … the Soviet level [of per capita consumption] to be roughly half that of West Germany and France, about two-thirds of that in Japan, and about three-fourths of the level in Italy … Soviet consumers are also less well off than consumers in most of Eastern Europe … The pattern of expenditures on consumption in the USSR is markedly different from that in the United States and Western Europe, and the differences are greater than might be expected from levels of development … The Soviet pattern in many respects conforms to that in the less developed countries, and remarkably little progress toward a more modern pattern has been made in recent decades. In this and other respects, the USSR is indeed the world’s most underdeveloped developed country.
Now we will start looking more closely at the results of comparison for each group. As I already said, it is not easy to criticize this study and even more difficult to offer contrasting calculations. In this and the next six chapters, I try to give as broad a statistical picture of Soviet consumption in comparison with American as possible. Frequent references to and criticism of the authors’ data help me to quantify many statements. I by no means strive to seek out and demonstrate everything that is, in my opinion, not quite correct in the authors’ calculations. But using their results as a point of departure and modifying them, I can offer some quantitative estimates.
We will consider now each subgroup listed in Table 5.4 and examine concretely the results of comparisons. I will also present some data from the Soviet and American literature.
There are few direct data on alcohol in statistical sources. None the less, some estimates of its production and sales (taking into account imports) are possible, but even this can be said of samogon (moon-shine).
Recall that by ‘soft’ goods we mean all consumer goods other than food and durables. Comparison is made difficult here, in addition to everything else, by different classifications in the statistics of the two countries.’ In Table 8.1 (as in Table 9.1 in Chapter 9) I first present figures for goods for which the classifications coincide, and then try to place similar subgroups of goods close to each other. Remember (Table 4.1) that according to the authors’ calculations, total Soviet per capita consumption as a percentage of American for this entire group is: in rubles — 32 per cent, in dollars — 48 per cent, and by the geometric mean — 39 per cent. I recommend that the reader examine carefully the indicators for expenditures on various goods in Table 8.1 and compare them with each other: they are interesting in themselves.
While in the USSR the consumption of soft goods is twice as large as of durables, in the US significantly more is spent on the latter than on the former (see Table 4.1). Unfortunately the CIA work gives only a limited presentation and a very meagre analysis of its results of comparison for this component of consumption. It is unfortunate because, as other basic components — food, clothing, and housing — are increasingly satisfied, the growth of the standard of living and significant qualitative changes in it are manifested in durables.1
It is quite clear that mankind’s material progress is expressed not only in the physical growth of the absolute volume of consumption, but in improvements in the quality of goods and the appearance of new ones. No less characteristic for our century is the rapid growth of the service industry. What used to be done at home with one’s hands is now done outside the home and by machines.
In describing in Chapters 2 and 3 the methods used in the CIA study, I did not say a word about education and medicine, but they were not compared in the same way as all other components of consumption. Here the authors’ task was exceptionally difficult.
It is time to consider several complex methodological problems. The authors themselves frankly list certain insurmountable difficulties but reduce them primarily to statistics [3]. While unquestionably agreeing with the authors that for decisive improvement of such calculations much better (and available) statistics are absolutely necessary, I permit myself to say that the methods also need improvement; they are far from blameless.
The major conclusions have already been stated, and here I will only repeat them briefly. The CIA study gives unique and priceless material for the analysis and further discussion of the problem. Without any exaggeration, its publication establishes a quantitatively new stage in the study of this problem — instead of general arguments and conjectures we can operate with concrete figures. Before a careful study of this work I could not justifiably quantify my own opinion about the extent of the Soviet lag. Having publicly stated a couple of years ago that Soviet consumption lags behind American by 4–5 times,1 I more or less hit the mark, but this was intuition; now I can defend my estimate with facts and numbers.
