RUSSIA SHOWS 'HIGH COMPETENCE' IN BUILDING ITS INDUSTRIAL MIGHT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70-00058R000100120063-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 9, 2016
• Document Release Date: October 6, 2000
• Sequence Number: 63
• Publication Date: April 29, 1956
• Content Type: NSPR

W.ASHINGTON STAR APR r 9 1956
Approved For Release 2001/03/02 : CIA-RDP70-00058R
ussia, Shows 'High competence'
In Building. Its Industrial Might
The Soviet "Union aas necome
t e second greatest industrial Pow-
in the. world, Today the gross
ational production of the, USSR
r slightly more than one-third that
the TTnited .,Mates; it' is about
ree-fourths again as far as that
the United Kingdom, wlch ranks
' ,third, place. We still have a, very
reat .lead, but the Soviet rate of
Capital goods and basic mat ' refs
rm in the Soviet Union "90'
are of its over-all gross national
reduction than , in he United
tates. Thus while their gross na-
Tonal production was only onejr
hird of. ours, their production
apital equipment is a much higher
ercenta;ilf,e,. namely, about 45, per1 1:
ent of ours.., A few examples will. graphically
llustrate the. areas 'of difference
he Soviet production of inachiri
ools now,exceedsthat of the Unite,
rates. however, their prbductio
f automobiles is. between 1 pe
ent' axld 2 per cent of ppr ow
(although if one adds iu,txucks a
yell as ppto.mobiles, their automo
ive prod+,ictlon is about 5 per cen
if ours). We produce 60 washin
achirnes for every one produce
n the USSR, and 5 radio slid 7%
ets for each one they produce fo
population ' almost one-fourt
anger than ours.
But before. going into a more de
ailed comparison of the, two coun
tries in the industrial and educa
to consider the general basis w
adopt for appraising Soviet tech
nical competence and accomplish
meats.
Because of rapid advances t
the, Soviet, Union has made in,r
cent, years, there is a growin
school of thought. that tends t
exaggerate Soviet accomplishment ;
to portray the Soviets, as. t
"giants" of the industrial wort .
There is another school that ten
to belittle what they have done a
to consider that while good at ches ,
the ballet or even in sports, th
arein some way mentally inferi
to Westerners. The truth lies wi
neither. of these extremes,
In my work as the director. f
the Central Intelligence Agency, I
have the problem of gathering t -
gether front, all intelligence souro s
available both here and abroad, t e
facts and figures on . the Sovi t
economy and then t ing the mo t
competent experts #atlable, in a d
e
out of Government, not only tho
in the CIA itself, to' examine a d
analyze the a facts and figures.
Olen W. Dulles, director of the Central
Intelligence Agency, has at his finger-
tips more information on developments
in the Soviet Union than any other man
in the Federal Government. Because
of the secrecy which shrouds Cl.A he
seldom makes public any of that in-
formation or conclusions it has caused,
him to draw. He departed from this
polity recently, however, in an unusual
speech in Cincinnati, from which this
article is derived.
The USSR in its industrial pro-
grams has. accorded second place
to its people's needs or wants. If
the Soviet leaders wish to, con-
centrate on military development
at the expense of all else, they do so.
if they wish to invest most of
their money in heavy industry-as
general,, this examination -as
they have done-at the expense of
has led me to the. conclusion that
the only safe position to take is
that in technical, engineering and
industrial fields the Soviets can
achieve any particular objective
we can achieve. Of course they
like to let us do the pioneering in
many fields and then Copy our
results. In some fields,, however,
they are doing pioneering work
on their own.
Those who have assumed that we
have superior technical )kills, that
we could produce atomic weapons,
aircraft and the like which are be-
yond the competence of the Soviet,
have generally proved to be, mis-
taken. Certainly in recetrt years I
have~rt,proceeded on any such
assumption. .
Highly Efficient Aircraft,
The Soviets -have shown high
competence In the field of nuclear
development both for military and
peaceful purposes. They have pro-
duced highly efficient aircraft, from
heavy bombers tq.helicopters. They
are highly competent in the field
of electronics, their steel industry
is efficient and the same is true
generally across the bo*rd in the
industrial field. Wheree,, *e partieu=
larly excel is in our highly colnpe='
tent manpower and in the efficient
use we make' of it, particularly
through the incentives our society
provides to call forth individual
effort.
There is no doubt that in many
countries, particularly among the
countries in Asia which have -ob-
tained 'freedom Over tite past few
decades, the rapid industrial prog-
do so. If the labor force, from their
point of view, can be used to better
advantage in one field than another,
they can and do shift, it accord-
ingly.
Reason for Confidence
While, as I have indicated, the.
Soviet industrial be is still only
a fraction of. our own, it is never-
theleas large enough to permit the
Soviet leaders to expand impres-
sively their Military capability, to
play, an increasingly active econom-
ic role in undeveloped areas and
to speak confidently at the 20th
Party C,longress of closing the gap
betweexf their output and ours.
As we assess our own position of
leadership and look to the future,
it may be well to note the chal-
lenge which this represents, to
understand how this rate of growth
has been achieved and also to look
at the prospects for the future.
The value of Soviet total eco-
nomic output has increased al-
most three-fold from 1928 to
date and this despite a devas-
tating war which set them back
severely during the period 1941-
1945. The rate of their industrial
growth during this period has
been about twice as high as the
rate of their overall growth since
important factors of their econ-
omy have lagged, particularly
agriculture and consumer goods.
How less this rate of industrial
growth been achieved? Four fac-
tors seem particularly important.
1 A large part of the total na-
; 1 ? tional production of the USSR
a very deep impact
ese Asian countries tend to has been devoted to investment.
We estimated that 24 per cent of
fort that the Soviet Union has the gross national production went
built upon years of pioneering work directly into capital investment in
in the United States and Western 1955 to increase the base for fu-
Europe, particularly in` developing ture industrial! growth and expand-
their industrial revolutions through ed military capabilities. Only 18
basic discoveries in the field of per cent of our gross national pro-
internal combustion, electricity, and duction is currently being used for
the like. The Soviets, in fact, started capital investment purposes and
more than half. way down the this is the highest percentage
I&1WSb1W1~7U1/tr7 TeVil o DP"v Fif '006
CPYRGHT
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Of course it ispcoosoleg to mate a ease - z 63-8
The USSR now has a out wo-
mphasis on the production
t
grea
e
that 18 per cent for us amounts to thirds the numbei of scientists that of machine tools. Viye have already
~, the United States has a far 'greater absolute total than
_ in the re- nbserved that their Output in. 1955
24 per cent for them. In their case,
however, heavy industry has been
the major beneficiary and is now
absorbing about 50 per cent of their
total investment.
Industrial plants and equipment
in the Soviet Union have nearly
tripled since 1940 and their invest-
ments have been allocated predom-
inately to the coal, oil and electric
power industries, to metalworking
and metallurgical industries.
2 Millions of workers have been
e transferred from agriculture. to
urban occupations and the agricul-
tural labor force, actually declined
some 6 per cent between 1938 and
1952. This loss, despite extraordi-
Allen W. Dulles
offers words of caution
--Sketch by t3Wmna audduth
nary efforts, has barely been made
good in the at three s. The
nonagricultural force on the other
hand increased about 60 per cent
3 A prodigious effort has been
expended on scientific ;and
technical education- Sovietcolleges
receive about` 500,000 studerits and
graduate about 250,000 each year.
Total United States entrants and
graduates are about 10 per
cent higher, but . the Soviet' s
train a far greater prf portion
in the sciences than we do.
In 1955 about 60 per cent of gradu-
ating full-time Soviet students were
in scientific and technical fields
compared with about 25 per cent n
the United States.' In 1955, the
Soviet Union graduated from all
advanced` schools about 80,000 in
the physical sciences and engineer-
ing and about 50,000 in the biolbgi-
cal sciences. In the United States
about 37,000 were graduated in the
physical sciences and 39,0Q0 in the
biological 'sciences. At this greater
rate of graduation in sciences-now
130,0010 annually in the Soviet Union
as opposed to 77,000 in the United
States--the' Soviets will attain an
imposing advantage in number of
scientists and engineers in a few
years time if they and w continue
e
physical and, biological sciences; produce these tools in volume, but
190,000 versus 280,0Q0. In research
they have the capability to produce
alone, the USSR has about half the complex high-precision tools.
number;
versa s perhaps e246,000, % 120,000 Starts in;Automation
I Soviet'; The sixth five-year plan out-
4 As I indicated t v
? industry has adV c by re lines in some detail Soviet plans
lying on the accumulated scientific 1 for the future. These can for the
and technical developnignts in .t1ie introduction of automatic processes
free world. Soviet: leaders have in the-- metallurgical, extractive,
telescoped a century 4'd a. half of machine building, electro-technical,
painstaking research effort into a chemical and construction indus-
few years and have realized all its. tries as well as a number of con-
benefits at relatively little cost to sumer goods industries. In the
themselves, machine-building industries it is
The princfpal lonk-terns economic proposed to put into operation some
task of the Soviets as pressed in 220 automatic and .Semiautomatic
the sixth 5-year,,plan s "to over- lines and shops. Obviously,, this is
taktie, and surpass the most de- just *start,
veloped capitalist countries" as re. In order to assure,.the rapid in-
gards per capita production." troduction of improved production
This general objective has, been' processes, a new ministry has been
thus amplified. by Saburov, ,a? mem- created-the Ministry for `Instru-
ber of the Politburo: ments.and Means of Automation.
"it is true that we have not yet What this seems to mean is
caught up to the United Stites either in that the-Soviets have now,pgssed
the.volume of production pet capita, and the point where expansion of out-
so for in the volume of industrial pioduc- put is to be achieved by simply
tion per capita. -However, the Me of_ adding more plant and equipment
try in the United States, permits us tt
overcome this lagging behind within a
very short historic period oftimq."
If this goal Is to be achieved it
means that forced draft lndustriali-
and equipment replacement, of
better work methods, and pro-
Mr
,es will command increasing
attention as the more economical
means for achieving output goals.
zation will be continued not only That the rapid pace of Soviet in-
through the sixth S-year plan, dustrialization has commanded a
but beyond. It will be accompanied high price in terms of consumer
by low standards of living, con- living sihdards and particularly
few services,' in terms of agricultural productio
tinued poor housing
,
very expensive clothing and an is clear. Both manpower and in-
adequate but uninspiring diet. Hours L, vestment have been diverted; from
of work will be high ''by United the farms to the urban centers
States standards even - . though
some further gradual reduction
from the recently announced 46-
hour week may'be expected. The
individual will have ei4ively little
freedom to select eithr his occupa-
tion or place of work., How long
will the Soviet men and women
tolerate this?
'e
Soviet'plans,for the next h
years, if they we met; will sig-
nificantly strengthen the VSSR's
war , supporting potential. Over
and above the enneral strength-
ening of the inustrial base; it is
expecte that the output of the
electron es industry, which con-
tribut many essential items re-
quir high perf ont~a4e milli-
tary~, etit flnclud1ng guided
missiles), will be tripled., Also,
in.the held of special heat re-
sistant alloys where the Soviets
have done so much for ,,funda-
ntiental research, the new five-
ysitr plan calls tor a',~sixfold
increase in productio,
Can the new ao ,' achieved?
major effort Ah,,~ic1, t
_
making in th)
and technical educatid
cientific
mechanization. Do, the .bye c iln-
mand of the necesary?technology?
The result is, that the growth of ag-
ricultural output over the past tw
decades has been lower than the
growth of population.
There is an approach to the ag-
ricultural problem, however, whic
the Soviets may exploit regardles
of how wo11 they succeed in meet
ing their agricultural goals.
As Soviet industrial capabilitie
rise and as costs of production de
cline, the opportunities for tradin
Soviet industrial commodities i
world markets for agricultural sup
plies will undoubtedly appear i
creasingly attractive. Moreove ,
their economic capabilities apps
tcifit nicely with their political o
jective of increasing'the volume
trade, with underdeveloped con
tries.
Thu's it may well turn out tha
the industrial growth which th
Soviets 1ce pushed so aggres
sively will provide a solutlop,;`;;no
only to tFte problem of feedin
their growing population, ltut als
the means for furthering the;
political ambitions in the 'under
developed areas of the, world.
T 0V & D
,, 1
at our pre ovec
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 Approved For Release 2001/0310
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111r' ~uyiek, iinaustrial an a uca-
tional systems which I have been
describing depend upon the dicta-
torial controls inherent in the Soviet
system. I have suggested that the
emphasis they have been placing
on heavy industry has been at the
expense of the standard of living
and consumer goods for the people.
Their educational system has like-
wise been subject to the dictates
of the state.
How long will the Soviet people
tolerate this situation; what courses
of action, what alternatives do they
have?. Education, after all, is a dan-
gerous drug for dictators. The Soviet
educational processes, even though
tied in with much Marxist indoc-
trination, and characterized by great
emphasis on the physical as opposed
to the political sciences, has taught
the people to think and to question.
Industrial development on the
: 'CIA-RDP70-00058R000100120063-8
large scale I have indicated has
developed many plant managers and
high-grade technicians. This is all
creating a "middle class" mana-
gerial group who feel a vested in-
terest in their jobs ? and want to
keep the advantages they enjoy.
The pressures that these trends
have created cannot be ignored by
the men i the Kremlin. While
they have arbitrary power, they
dare not exercise it tvith total
disregard for the feelings and senti-
ments, the convictions and yearn-
ings of the people on whose efforts
the Soviet syste depends.
Pack to Malenkov Idea?
We have already seen that Ma-
le kov when he took over , the
Kemlin leadership In 1953.started
a', trend toward producing more
consumer goods. Then, presum-
ably as, the effect of this began to
be felt too drastically in the field of
heavy industry and military pre-
paredness, the trend was substan-
tially modified, and in the process
Malenkov Gas demoted. Malenkov
is still in the Politburo, and he may
be coming back again to 'a posi-
tion of greater influence. Does this
foreshadow another round of offers
of greater material benefits? This
time will the Soviet people again
hive to live on promises of abetter
lif`e' or will this dream have some
reality?
The Soviet leaders have been
taking certain steps both interna-
tionally and domestically which
they hope *ill have a calming ef-
fect on their own public opinion.
These steps are abound up with the
dramatic progtain of de-Stalinlza-
tion, whiel3 is an Attempt to re-
pudiate their erstwhile hero, dic-
tator, political and military leader.
and expounder of the Marxist-
Leninist faith.
It is not easy to predict the
direction, In broad human terms,
that Soviet society will take. The
Soviet leaders themselves prob-
ably do not see clearly the final
turnings of some of the paths
down which they have set. My
guess is that modern industry,
technology and education, which
today unquestionably are mak-
ing the Soviet Union-into a very
powerful nation indeed, may in
the long 'run prove to be a
leaven that gradually transmutes
Soviet society into a new. form
which will not tolerate.the pres-
ent type of dictatorship.
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