THE INDUSTRIAL AND TECHNICAL CHALLENGE OF THE U.S.S.R. ADDRESS GIVEN BY ALLEN W. DULLES AT THE UNIVERSITY OF CINCINNATI'S 10TH ANNIVERSARY OF COOPERATIVE EDUCATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R001700030006-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 17
• Document Creation Date: December 19, 2016
• Document Release Date: August 10, 2006
• Sequence Number: 6
• Publication Date: April 29, 1956
• Content Type: SPEECH

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l
i E:i Ii'N L TJST .ZI1?yL r?T; T .CHI TICij. CHhLL NG-E
THE: U. S. S.-I.
ALL - ,S3 GI3Y A.L?,EN vv, .vUL:.ES, i:Lt-CT,,1 CF
TI-L C`c,NT lopment here in the United 3sates a
greater deterrent to any power t?'-it would disturb the peace tha:s the
industrial p:tentia.l of this country. Both the Kaiser, in 1917, and H-i-Jer.
in 1941, were strangely blind to our industrial p ewer; -- the one when this
country was vigorously developin? its latent resources, and the latter wh,-;-
cur industrial strength had already reached a high point. Hitler was tiviro
in learning ignorance of this country's industrial migi2t when he risked war
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with the United States and brought his country to destruction.
The Soviet leaders, I believe, are betier advised on this suhj ct
than were the German leaders of those days. Many Soviet officials saw at
first hand what this country could do under the stress of wartime m3,::ilizui c -a
and others at the and of the pipeline in the U.S.3._.. itself came to eal.:z4t
what our industrial power meznt and what it could achieve even on sh )rt
notice. &Imon.g the top Soviet leaders, Mikoyan, has actually seen Ameri.ctr:
industry at work.
The fact of this knowledge is important today because no fore gn
power i3 likely to risk entanglement with this country until they feel :hey
themselves have forged an industrial machine which is comparable t_: ours
or unless they feel confident That through atomic attack they could crppl: ,
destroy our industrial ?ease.
U. ,r.. ,
The first of those goals, namely industrial parity wiih the
will not we within reach of the Soviet UniOn in tiro near future despite 3cviet
progress.
The second possibility, nannely vulnerability to atomic attack.
mDre uncertain factor. H:,tiveve:- as long as we maintain a stron, del .nsc?
with a ready potential for counter attack, war becomes a risky venture for
anyone who would resort to it.
Your Program C-rn~nittee suggested that it might be a useful suppi
m nt to your r: view of America's dramatic pro,,ress in education an,
industry to have a look at what our chief and growing competit:r, the 50%ic ;
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Union, is doing in these fields. The subject may be a timely one. At --he
recent 20th Congress of the Communist Party, as well as in the recent
announcement of the Sixth F ive Year Plan, the Soviet Union has presented it
program for the future and in effect issued a challenge to us. I -hall i riefly
discuss the nature of this challenge.
The Soviet Union has bacon; the second greatest industr:al poc'er in
the world. Today the gross national production of the USSR is slightly more
than '?/3 that of the U.S.; it is at-out 3/4 again as large as that of the taiteci
Kingdom which ranks in third place, vi to still have a very great lead, )ut
Soviet rate of progress is rapid.
Capital goods and basic materials form in the Soviet Union a -a: Sat r
share of its over-all gross national production than in the United 3tatd..
Thus while their gross :national production was only 1/3 of ours, their pro-
duction of capital equipment is a much higher percentage, namely a::o 4.i.
of ours. A few examples will graphically illustrate the areas of di fer_,.ncc.
The Soviet production of nzacaine tools new exceeds that of the United ;tatt
However, their production of automobiles is ootween i'/o and 2-;o of our own
(although if one adds in trucks as well as automobiles, their automotive
production is a' out o of ours.) o produce E0 washing machines f.:,:c over v
one produced in the USS , and S~ radio and TV sets fv_ each one they p-~educ
for a population almost . /4 larger than ours.
Bit before going into a m_,ra detailed comparison of the two countr:
in the industrial and educational fields, it may be worthwhil=e t.e consider tae
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general basis we adopt for appraisin3 Soviet technical competence and
accomplishments.
Because of rapid advances that the Soviet Union has made in r-cene
years, there is a growing school of thought that tends to e,:aggerate S,,vi't
accomplishments; to portray the Soviets as the "giants" of the industr.al
world. There is another school that tends to belittle what they have d_>ne a-o
to consider that while good at chess, the ballet or even in sports, the,,- are.
in some way mentally inferior to westerners. The truth lies with nui?her
of these extremes.
In my work as the tirector of the Central Intelligence J Frency, I hav :
the problem of gathering together f om all intelligenc s ounces availa le both
here and abroad, the facts and figures on the Soviet economy and then getting
the most competent exports available, in and out of government, not only
those in the CIA itc;lf, to examine and analyze these facts and figures
In general, this examination has led me t:~ the conclusion that the
only safe position to take; is that in the technical, engineering and indn3tri:l
fields, the Soviets can achieve any particular objective we can achieve. ~f
course they like to Let us do the pioneering in many fields and then coey oui
results. In some fields, however, they are doin` pioneering work on heir
own.
Those who have assumed that we have superior technical skills, that
we could produce atomic weapons, aircraft and the like which are bey::,nd the
competence of the Sovit, have generally proved to be mistaken, Certainly
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in recent years I have not proceeded on any such assumption.
The Soviets have shown high competence in the field : f nucloar-
development both for military and peaceful purposes. They have prod%ced
highly efficient aircraft, from heavy bombers to helicopters. They ar : hi klf ,r
competent in th field of elcctronicc, their steel industry is efficient and
same is true generally across the board in the industrial field, .'hare we
particularly excel is in our hi-.hly competent manpower and in the efficient
use we make of it, particularly through the incentives our society prole idac.
to ca.l forth individual effort.
There: is no doubt that in many c:,uncrios, particularly among the
countries in :-sia which have cbtained freed-) n over the past few decac ee s,
rapid industrial progress of the 3 .viet Union has made a very deep im .3ct.
This impact has been i:.Zcr :a e.i as the ;soviet Union has come forward ' i .h
tempting offers in the field of military and industrial equipment.
These Asian countries tend to f;-rgot that the 3..viet Uni rn has ~-- ilt
upon years of pioneering w . r:: in the' Uni;:ed 3ta t..s and `J'1 ecte:n i uron3
particularly in develcpin their industrial r;:vDlutions through bacic dis-
coveries in chi: field tf into mal c:rnbi. stion, electricity, and the like. it
was in the basis of this know-how that the 3 viet Union has quilt.
The Soviets ha-,e been adept at takin? from us and adapting to tI ?ir
wn uses the most s phisticated equipment and devoting their own en,7in aeranj
talent in many cases t L, trying to develop further from the base which w hav
handed them on a silver plater. They did not start from scratch. hev, i A,
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fact, started more than half way down the course of the industrial rev Autao'i
This fact is not generally taken into account by certain other countries which
have been less fortunate in their industrial development and erroneously
attribute to the Soviet system accomplishments which, in fact, are tax:, wori;
~f free enterprise and a free educational system.
The USSR in its industrial programs has accorded second plac _: to
its people's needs or wants. If the Soviet leaders wish to concentrate on
military development at the expense of all else, they do so. If they wish o
invest most of their money in heavy industry -- as they have clone -- :t the
expense of light industry and agriculture, they do so. If the labor force,'[ ri
their point of view, can be used to better acvantage in one field than another,
they can and do, shift it accordingly.
-`While, as I have indicated, the 33viet industrial base is still t ily i
fraction of our own, it is neve:rthel.;ss large enough to permit the Soviet
leaders to expand impressively their military capability, t : play an it =re: ini Iy
active economic role in undveloped areas and tc speak confidently at the
20th Party Congress of closing t'_-ie gap between their output and ours.
As we assess our own position of leadership and lock to she fu ure.
it may be well to note the challenge which this represents, to underst41-i-45. The rate of their industrial f,r':;w h
during this period has been about twice as high as the rate of thei ov, r-a::
growth since important factors of their econainy have lagged, particularly
agriculture and consurn r gods.
How has this rate of industrial growth been achieved? Four factors
seem particularly irnporLant.
1) A large part of the total national production of the U33R ha been
devoted to investment. Yva estimate that 24/ of the gross national p:cr,ducii.sni
went directly into capital investment in l 1i55 to increase the base for iatui-
industrial growth and expanded military capal:ilities. only lv,/o of our gr:
national production is currently being used for capital investment
and this is the highest percentage achieved in the post-war period.
Cf course it is consoling to note that, ii/0 for us amounts i:0 a ar
greater absolute total than 24-/'0 for therm. In their case, however, h _ vy
industry has keen the major beneficiary and is now absorbing about ~f ,"0 cf~
their total investment.
Industrial plant and eauipm-,nt in the 3oovi..t Union has n: arly tripled
since 40 and their investments have been allocated predominately t:, the
coal, oil and electric power industries, to metalworking and metallurgical
industries. This high allocation to th se pa titular industries, as no=ed
above, has h-een at the expense of the present welfare of the p;pulatian which
has been accorded minimum requirements and a residual position in the
execution of 3 oviet planning. Two example, s of this stand out:
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While:, capital goods output was rising over tenfold, agricultural
producti.,n has barely kept pact, with the growth of population.
Ambitious plan goals f:,r heavy industry are usually made or su rpaj s=
unimpressive goals for consumer goods and agriculture have fared batty.
2) Millions of woricers have been transferred from agriculture to
urban occupations and the agricultural labor force actually decli ied seine )7)
between 1938 and 1952. This loss, despite extraordinary efforts, has bar-iy
been made good in the past three years. The non-agricultural force o;i phi:
other hand increased about 6070 during this period.
3) A prodigious effort has been expended on scientific and technical
education. Soviet colleges receive about 500, 000 students and graduat-, about
250, 000 each year. Total U.S. entrants and graduates are about 10 p rco:it
higher, but the Soviets train a far greater proportion in the sciences t--,an wre
do. In i^55 about 60 percent of graduating full-time Soviet students w. re in
scientific and technical fields compared with about 251 in the U.S. Its 195L,
the Soviet Union graduated from all advanced schools about 80, 000 in t_le g?_.
physical sciences and cnrine ci iri and about 50, 003 in the biolegica 1 scicnc:e .
In the U.S. about 37, 000 were graduated in the physical sciences and OOJ Li
the hiclogical sciences. t .his greater rave of graduation in science: -- t~~}f-
130, 000 annually in the Soviet Union as opposed to 77, 000 in the U.S. - t`i-:
Soviets will attain an imposin advan.a:e in number of scientists and spine s
in a Eew years time if they and we continue at our prasent rates.
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The U.S.S.R. now has about two thirds the number of scientists
that the U. S. has in the research and teaching aspects of physical and
biological sciences; l;0, 000 versus 280, 000. In research alone,
the U.S.S.R., has about half the U.S. number; .120, 000 versus perhaps
240, 000.
4. As 1 indicated above, Soviet industry has advanced by relyi