THE ECONOMY AND SCIENTIFIC MANPOWER RESOURCES OF THE SOVIET UNION, AN ADDRESS DELIVERED BY ALLEN W. DULLES TO THE INDUSTRIAL ASSOCIATES OF THE CALIFORNIA INSTITUTE OF TECH.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R001700030008-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 16
• Document Creation Date: December 19, 2016
• Document Release Date: August 10, 2006
• Sequence Number: 8
• Publication Date: January 31, 1956
• Content Type: SPEECH

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THE ECONOMY
AND
SCIENTIFIC MANPOWER RESOURCES
OF THE SOVIET UNION
An Address Delivered by
ALLEN W. DULLES
to the
INDUSTRIAL ASSOCIATES
of the
CALIFORNIA INSTITUTE OF TECHNOLOGY
New York City
31 January 1956
MORI/CDF
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THE ECONOMY
AND
SCIENTIFIC MANPOWER RESOURCES
OF THE SOVIET UNION
During the more than quarter of a century that has passed s ?.nce
the consolidation of Stalin's power position in 1928, the Soviet Ur Son
has risen from the status of a relatively underdeveloped country
to unquestioned rank as the second largest economy in the world-
This growth, even the more remarkable considering the destructive
effects of World War Ii, has been achieved by the transfer of
millions of workers from agriculture to urban occupations. At he
same time a prodigious effort has been made to educate large number,3
of Soviet citizens in modern skills and technology, and an unusually
large portion of total national product has been devoted to investment,
We estimate that 23 percent of Soviet gross national product goes
directly into capital investment--the base for expansion of future
military capabilities. Only 15 percent of our own gross nationa'
product is used for capital investment purposes. By such mean s, tt,,.-
USSR has obtained a very rapid expansion in industrial output. As a
logical result, the welfare of the population has been treated as a
minimum requirement in planning and as a residual in plan ext .uti ,~.
Two examples makes this clear:
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First, while capital goods output was rising over tent=aid,
agricultural production failed to match even the growth of popu?-
lation, indicating a decline in living standards.
Second, plan goals for heavy industry are usually sur=_)asse:
while the correspondingly modest goals for consumer good: are:
chronically underfulfilled.
At the present time the total output (gross national product) of
the USSR is more than a third that of the United States and about thr' e -
quarters again as large as that of the third largest economy, the Unite:.
Kingdom. In general, Soviet production of capital goods and basic
materials forms a larger proportion of their total output than does
equivalent production in the United States. For example, despite a
gross national product only one-third as large, Soviet production1 of
coal and of machine tools today is about equal to that of the United
States; at the same time. USSR output of automobiles is less thaw one.
eightieth of our own.
My people have read with interest your publication Resources of
the World. As applied to the Soviet Union, the problem of food
availability appears to be more difficult of solution than the prob.ems
of raw material, energy resource, and technical manpower scar- .ities.
Both historical review and current analysis of Soviet economic p ilic r
close greater determination and success in coping with the latt;ar
three problems than in increasing the adequacy and variety of their fco:
supply.
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In their struggle to provide an adequate and varied diet thf Sov-
have inaugurated their "new lands" program to increase grain applies.
Whether or not this program will in the long run meet with the hoped
for success remains a big question. The lack of adequate rainall
makes success doubtful. Soviet land resources are not unlimi-ed as
pointed up by Soviet experience this past year in seeding areas to
grain that are even now being abandoned to return to grass. T.:ae in-
crease in acreage will eventually reach its limit and alone caxuvot be
expected to solve the problem of feeding an ever-increasing popular-or:..
If the Soviet ever expect to fulfill their promises of a more: var?xcyci
and high quality diet for their people, they must invest heavily in aax:-
culture and related industries. They must greatly increase the avai?-
ability of fertilizers and special purpose machinery for tilling end
harvesting corn, vegetables and other crops as well as rnachincry re??
quired in developing their animal industry.
Even with a maximum effort of expanding acreage and heavy invvE.tt-
went in the means of production, it is probable that the increasing
population will overtake availabilities and the Soviets will befarced t )
increase their imports of quality foods.
The recently announced Sixth Five Year Plan (1956-1960) cctantiruv:r.
the traditional Soviet policy of emphasizing expansion of heavy :.ndustz -:1
output. The accompanying chart shows their industrial production n
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billions of dollars as compared to that of the United States. Af car. b)_
seen, total Soviet industrial production in 1960 will be nearly tv o-
fifths as great as that of the United States. By contrast, in 195) Soviet
industry was only one-fifth as large as that of the US. To maintain
this rapid rate of growth, the USSR must stress labor producti-;ity
even more heavily than in the past. The two-thirds increase it invest-
merit and the preoccupation with technology indicated in the uev. P1it:
underscore the vital role Soviet officialdom has accorded to in--estrr. ec.t
as the chief factor in continued rapid growth. Although Soviet anduitc l
and the Soviet economy as a whole may experience a somewhughl-v
comparable to government, commercial, and private research (sta-
lishments and laboratories in the U. S. A notable example is the
Central Aerohydrodynamics Institute which does work cornparat le to
the laboratories of our National Advisory Committee for Aeronrautics.
(3) Higher educational institutions employ the remaining tali
of the Soviet scientist E. as teachers. This segment has recently= been
criticized for failing to provide its share of useful research i ie w-i-1-
that American university scientists do.
Research is not as carefully planned and coordinated as nai:;ht `:>>
expected in a totalitarian economy. There is much pareUelis;n sinrz
each ministry plans its own research program. There is the heavy
hand of bureaucracy as shown by the comment of the vice presikj_ent
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of the Soviet Academy of Medical Sciences, "We not only orgarire
badly, .but we constantly reorganize. " The Academy of Science.
USSR, is attempting by a community structure to coordinate actvitie s
on a project basis.
Furthermore, the Communist Party has great power and is an
effective means of insuring coordination in areas of high priority.
We can see the effect of party discipline in such program as atomic
energy, guided missiles, aircraft, and electronics. For example, tht
Soviet Five-Year Plan recently announced plans for the constru ;tion c
the period 1956-1960 of 2, 000 to 2, 500 megawatts of electrical Power
generating capacity using nuclear energy. Under present plan6i ltbe
U. S. will construct approximately 800 megawatts capacity in the
same period. Even granting an economic need for this formidable
Soviet goal, we can also see its political expediency and the dramatic
support it gives to Soviet propaganda lines.
On the other side of the ledger, party interference in genetics
during the Lysenko controversy certainly contributed to the Soviets
sizeable agricultural problems. Generally speaking, however, pa:-F.v
interference has not presented a major obstacle to progressive
research.
Party and government policy assures adequate funds for sE ien;.i:
research. In terms of gross national product, the Soviet research
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expenditure of about one percent is comparable to our own. A c':iret
dollar comparison of the Soviet and U. S. expenditures is not feisibl?
but there may be less disparity between the research efforts of i-he
two countries than would be indicated by the 1:3 relationship bet?oreei
Soviet and U. S. gross national product.
The most universal means of encouraging efficient utilizati ,n of
research resources is an effective method for the dissemination of
scientific knowledge. The Soviets have a comprehensive system:.: of
abstracting the world's scientific literature which puts them in an
enviable position to exploit foreign developments. We have exar:-tple
of published American scientific articles appearing in Soviet ab-
stracting journals before their appearance in the comparable Airierizanr
abstracting journals. Such an effective abstracting service makes a
considerable contribution to the direction of the research effort toward
promising investigations and to the elimination of duplication.
Soviet research has achieved some notable results. Its acb:eve-
meats vary according to the nature of the research itself and aa,.ord-
ing to the field of probable application. Generally, Soviet scientists
are quite good in theory; in the theoretical aspects of physics, or
example, the Soviets are on a par with any country in the -world, their
theoretical metallurgy is outstanding, and some of their researc ". it
human nervous system, following the Pavlovian school, is quaii . iti%?_. v
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In summary, these are the highpoints of this review of the eccr, ;.:y
power and military strength as opposed to the consumption sector
the civil economy. The latter has been little affected by scientific
research and development.
capacity to absorb research results in all fields as does ours. Great3:
use of research results therefore is made in areas essential tc national
through a system of priorities. The Soviet economy does not t?.ave
unique. They may tend to lag a bit in experimental work, but there
are enough exceptions here to make such a generalization precaricc.=!.
Certainly, we have to give full credit to their development of a ten
billion volt proton synchrotron, the largest particle accelerator in
the world.
Soviet research achievements are incorporated in Soviet t+--chr6j'=gy
and scientifid manpower :resources of the Soviet Union:
A. During the post war period, the Soviet economy has
continued to expand at an unprecedented rate.
B. The Soviet leaders realize that the continued expa-sior=
of their economy and thus their war-making potential is dependent or
a continually increasing corps of scientists and engineers.
C. Their pool of highly trained scientists and enginee?s, n:'c
approximately equal to that of the U. S. , is being increased at a pic--
portionately greater rate than ours--in a few years we may set there.
attain a decisive advantage in total numbers.
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D. A vigorous program of training of specialized tecIu ician3
will improve their relative standing in this important category.
to
E. By the functioning of state control the Soviets are able
direct the stream of trained scientists into proper channels according
to need.
F. There is no sparing of funds for scientific resear
G. It is the announced Soviet intention to utilize the best a
available foreign scientific knowledge and they have instituted a large
scale system for such exploitation.
H. Scientific achievement is encouraged by a system cf awa;Fd s
and special privileges which elevates scientists to the top rung n the
communist version of the socio-economic ladder.
I. The USSR makes full use of the contribution which wore,
can make to its scientific effort.
These are statements worth pondering.
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