INDUSTRIAL LABOR PRODUCTIVITY IN THE USSR

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CIA-RDP79-01093A000500190004-0
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February 9, 1999
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4
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August 9, 1954
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UMENT N0. _._.~ NO E IN CLASS, D CLA C,-LA-SSwCH.Af Ts s NEX REV EW' DATE, = AUTH- 7 - Approved: For Release 99J1109IO7 CIA-RDP 9-01893x000500190 1943AO00500laGO04-0- THE USSR Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 WARNING This material contains information affecting the National Defense of the United States within the meaning of the espionage laws, Title 18, USC, Secs. 793 and 794, the trans- mission or revelation of which in any manner to an unauthorized person is prohibited by law. Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 CONFIDER ANM" US OFFICIALS ONLY PROVISIONAL INTELLIGENCE REPORT INDUSTRIAL LABOR PRODUCTIVITY IN THE USSR CIA/RR PR-68 (ORR Project 45.269) NOTICE The data and conclusions contained in this report do not necessarily represent the final position of ORR and should be regarded as provisional only and subject to revision. Comments and data which may be available to the user are solicited. CENTRAL INTELLIGENCE AGENCY Office of Research and Reports Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T CONTENTS Page Summary . . . . . . . . . . . . . . 1 I. Total Trends. . . . . ? 2 . . . . . . . . ... . . . . . . 1. Scope and Characteristics of the Data . . . 2 2 . War and Postwar Changes. . . . . . . , ? . ? . . ? 3 a. Period of the Fourth Five Year Plan (19L-6-5o) . . ? 5 b. Period of the Fifth Five Year Plan (1951-55) ? . . . . . . . . . . . . 6 c. Future Prospects. . . . . . . . . ? 8 3. Factors Affecting Soviet Labor Productivity and Its Measurements . . . . . . ? ? 9 II. Individual Economic Sectors 1. Coal Industry . . . . . . . . . . ? ? 13 2. Peat Industry . . . . . ? ? . . . . . 13 3. Petroleum Industry. . . . 15 4? Ferrous Metallurgy Industry 15 a. Iron Ore Mining . . . . . ? ? 17 b. Pig Iron Smelting , ? , ? , . . ? ? ? 17 c? Steel Smelting. . . . . . . ? 18 d. Casting and Rolling . . . . . . . , , , . ? . ? 18 5. Timber Industry . . . . . . . . . 18 6. Cotton Textiles Industry. . . . . . ? ? ? ? 19 7. Chemicals Industry. . . . . . . ? ? . ? ? ? ? 20 8. Soviet Metal-Fabricating Industries . . ? ? ? , ? ? ? 20 a. Antifriction Bearings Industry. . . . 22 b. Automotive and Tractor Industry . . . . ? ? 23 c. Transport Machine Building Industry . . . . . . . 23 d. Oil Machinery Industry . . . . . . . . . . . . . . 24 9. Railroad Transport. . . . . , , , S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Page 10. Construction. . . . . . . . . . . . . . . . . 25 Appendixes Appendix A. Methodology . . . . . . . . . . . . . . . . . . 27 Appendix B. Gaps In Intelligence . . . . . . . . . . . . . . 33 Appendix C. Sources and Evaluation of Sources. . ... . . . . 35 1. Indexes of Productivity in Selected Industries in the in the USSR . . . . . . . . . . . . . . . . . . 4 2. Indexes of Production, Productivity, and Employment in the USSR, 1940 and 1948-55 ... . . . . . . . . . . . . 5 Indexes of Production in Selected Industries .in the USSR, 1940-50 . . . ... . . . . . . . . . . . . 6 4. Comparison of Productivity of Industrial Sector in the USSR and in the US, 1950 and 1970 . . . . . . .Indexes of Labor Productivity in Selected Economic Sector in the USSR, 1953. . . . . . . . . . . . . ? . . . . 11 6. Annual Output per Worker in Coal Mining in the USSR, 1938-53.. .. ....... ... .... Annual Output per Worker in. the Peat Industry in the USSR, 1945-53 . . . . . . . . . . - . . . . . Index of Output per Worker in the Petroleum Industry in the USSR, 1949-53 . . . . . . . . . . 16 S-E-C -R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S -E -C -R -E -T Page Indexes of Output per Worker in the Ferrous Metallurgy Industry in the USSR, 1948-53 . . . . . . . . . . . . 10. Indexes of Output per Worker.in the Cotton Textiles Industry in the USSR, 1946-53 . . . . . . . . . . . . . 11. Index of Labor Productivity in Machine and Instrument Construction in the USSR, 1948-53 . . . . . . . . 21 12. Index of Output per Worker in State Bearings Plant No. 1, Moscow, 1947 - 51 . . . . . . . . . . . . . . . . . . . . 22 13. Output per Worker and Index of Output per Worker in Railroad Transport in the USSR, 1945-53. . . . . . . 25 14. Index of Output per Worker in Construction in the USSR, 1946-53 . . . . . . . . . . . . . . . . . . . . . . 26 15. Indexes of Production in Selected Industries in the USSR, 1934 . . . . . . . . . . . . . .. . . . . . . . . . . . 28 16. Indexes of Industrial Production in the USSR, Selected Years, 1940-53 . . . . . . . . . . . . . . . 30 Illustrations Following Page Figure 1. Soviet Official Indexes of Industrial Production, Productivity, and Employment . . . . . . . . . . 8 Figure 2. Soviet Official and CIA Indexes of Industrial Productivity . . . . . . . . . . . . . . . . Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 CIA/RR PR-68 (0RR Project 45.269) S-E-C-R-E-T INDUSTRIAL* LABOR PRODUCTIVITY IN THE USSR*- Summary Increasing the productivity of industrial labor represents one of the major economic objectives of the Soviet government, the Party, and the individual industries. In the postwar period a high level-of investment, improved technology, better management, and greater skill on the part of workers have been reflected in striking advances in output per man year in industry. Soviet official indexes show that by 1948 industrial labor productivity had recovered from the effects of World War II. From 1948 to 1950 the Soviet index based on 1940 continued to advance rapidly, moving from.108 to 137 -- an increase of 27 percent in 2 years. The Fifth Five Year Plan (1951-55) pro- jected a further gain by 1955 of 50 percent over 1950. On the basis of reports of attainments for the first 3 years of the Plan period, however, it appears that the original goals will not be met and that the Soviet index of industrial labor productivity in 1955 will increase only about 36 percent over 1950. There is considerable disagreement as to the exact meaning of Soviet figures on productivity, which may overstate the increases achieved and should be used with reservation in international compari- sons. Nevertheless, it is believed that published Soviet figures are useful in giving an approximation of trends in industrial labor pro- ductivity in the USSR. * Industrial in this report refers not only to the manufacturing and extractive sectors but also to transportation, construction, communica- tion, and other activities which support production. In Section I the general index of productivity covers only the manufacturing and extrac- tive sectors, while in Section II construction and rail transport indexes are included. ** The estimates and conclusions contained in this report represent the best judgment of the responsible analyst as of 1 July 1954. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Comparisons among industries indicate that the progress has been uneven. Those industries exhibiting the earliest and most persistent postwar gains included the metals and machinery industries, which were favored both as producers of capital goods and as suppliers of mili- tary end items. Progress in the extractive industries and in consumer goods manufactures was slower. I. Total Trends. 1. Scope and Characteristics of the Data. Labor productivity is defined in this report as the output of a product per unit of labor input.* No attempt is made to measure separately the effects of changes in capital investment, technology, management, and the skill of labor. This report considers rather the combined effect of these factors of. production on labor productivity, together with some comment on their general trends. A productivity index may be considered to be a fraction, that is, a measure of production divided by a measure of employment. It is therefore affected by all the errors which may occur in either the measure of production or the measure of employment selected. In com- puting aggregate indexes,** moreover, serious statistical biases may be introduced by the technique used for weighting component parts in order to build up a representative total. This problem is most serious in the case of measures of production, since output is frequently ex- pressed in different units which must be weighted by value or some other common measure before they can be added together. These * The labor input unit used throughout, unless otherwise stated, is the man-year, which is treated as synonymous with persons employed. This is not so precise as the use of man-days or man-hours, but labor input in these preferable units could not be calculated from available statistics. * Aggregate indexes are those which combine the trends of subsectors into a "representative" total trend, for example, combining trends in the production of a number of types of machines into an over-all ma- chinery index or the combination of a number of individual industry indexes into a total industrial measure. Both of these levels of aggregation underlie some of the series presented in this report.. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T difficulties in computing satisfactory measures of total labor pro- ductivity have given rise. to extended discussion both by Soviet econo- mists and by the Western economists who attempt to use Soviet statistics. For this reason, this report does not attempt to detail all of the pitfalls for the unwary user of productivity statistics but summarizes the principal criticisms in the methodological., appendix (see Appendix A). Although the reader is warned by the preceding paragraph that productivity measures cannot be interpreted as presenting an exact picture, the trends are so pronounced that useful conclusions may be arrived at even from the crude materials at hand. The postwar years, with the one prewar year, 1940, to which they can be related, have been selected for analysis partly because differences in the structures of prewar and postwar economies make comparisons deceptive and partly because there aresserious technical deficiencies of the materials for measuring aggregate productivity prior to 1940 (see Appendix A). It may be said, however, that evidence on the expansion of physical volume warrants the statement that the prewar period was one of substantial achievement in production and pro- ductivity even though a satisfactorily precise aggregate measure cannot be agreed on.. Table 1* shows advances in volume of physical produc- tivity per worker from 1928 to 1935, as calculated by Walter Galenson in a RAND report. Some of the newer industries probably gained even more rapidly in the prewar period. Soviet claims of increases in produc- tion of machinery in 1937 yield an estimate of 526 percent of 1928 and in electric power, of 722 percent, which on the basis of available information on employment would suggest rapid increases in productivity. During the prewar period (1928-40) the Soviet official index of productivity in large-scale industry advanced to 324 percent. As has been indicated, however, this was based on a production index which was subject to such inflationary biases that it is generally dis- credited. 2. War and Postwar Changes. Postwar changes in the Soviet system of pricing industrial pro- ducts and lessening of the relative importance of new products included Table 1 follows on S. 4. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02-: CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Indexes of Productivity J in Selected Industries in the USSR J* 1935 1928=100 Industry Index Iron Mining 232 Petroleum 158 Blast Furnaces 209 Steel Mills 154 Cotton Yarn 97 Cotton Cloth 112 in the official index should have eliminated, to a considerable degree, the biases in the prewar production index and should make appraisal of the Soviet claims easier for current years.* Scarcity of firm data on physical volume of production in postwar years makes it difficult to secure independent checks on the extent to which this inflationary price bias has been eliminated from the official index by comparing it with indexes based on physical volume. Two such efforts at estimating production from physccal vol- ume (weighted in proportion to payrolls) have been made, one by Donald Hodgman and one by CIA/ORR. The methodological appendix dis- cusses the technical problems involved in such comparisons. Table 2*** compares the Hodgman index and the CIA index of industrial production with the Soviet official index. The second section of the table compares indexes of productivity derived from these production indexes by dividing them by the same index of in- dustrial employment. It will be noted that throughout the period all of the indexes register substantial increases in production, indicating recovery to * Footnote references in arabic numerals are to sources listed in Appendix C. X See Appendix A, Section 2, b. Table 2 follows on p. 5. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : C1A-RD'P79-01093A000500190004-0 S-E-C-R-E-T Indexes of Production, Productivity, and Employment in the USSR 1940 and 1948 - 5 5 Production Employ- Productivity ment a ,~ Soviet Soviet Year Hodgman J CIA J Official Hodgman CIA Official 1940 100 100 100 100 100 100 100 1948 108 99 117 J 108 100 92 108 1949 131 117 , 141 J 115 116 102 122 1950 150 138 173 126 121 110 137 1951 172 157 201 133 131 118 151 1952 N.A. 177 225 e/ 14o N.A. 127 161 1953 N.A. 190 250 J 146 N.A. 130 171 1954 N.A. 207 273 1 152 N.A. 136 179 1955 N.A. 224 295 J 158 N.A. 141 187 a. Employment series froml9+9 to 1953 computed by dividing official production series by official productivity series; employment for 1954 and 1955 projected on the assumption of smaller increases in in- dustrial employment in these years than in the period 1950-53. / b. F3/ a.e. f. Projected on the assumption that the Fifth Five Year Plan for a 70-percent increase in production would be fulfilled. the 1940 level by about the beginning of 1948 and a steady rise there- after. The officially announced increases in production and produc- tivity are consistently above those computed from the ORE and Hodgman estimates, but there is no scientific method of determining which in- dex gives the "truer" picture of industrial expansion. a. Period of the Fourth Five Year Plan (1946-50). Since Soviet production and productivity suffered cataclysmic declines during the was except in those defense industries S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02: CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T located safely beyond the area of war damage, it is remarkable that the. economy recovered to 1940 levels by 1948. This is a testimony to the ruthlessness of the drive of Stalin to rehabilitate the productive ma- chinery and in part to the willingness of the workers, at least temporarily, to cooperate in spite of the lack of substantial improve- ment in their level of living. Statistically the year 1950 is characterized by a rise in the official index of production to 173 percent of the 1940 level and of productivity to 137 percent of the 1940 level (see Table 2). The CIA index indicates a growth of 38 percent in production and 10 percent in productivity. Comparison of the production increases in various industries from 1940 to 1950 indicating the concentration on heavy industry is given in Table 3. Indexes of Production in Selected Industries in the USSR 1940-50 1940=100 Industry Fabricated Metals 300 Defense 128 Chemicals 192 Nonferrous Metals 204 Electric Power 189 Manufactured Consumer Goods 120 Food Products 101 Forest Products 88 b. Period of the Fifth Five Year Plan (1951-55). Continuing the trends of the previous 5 years, the pro- jections for the Fifth Five Year Plan called for a further increase in production of 70 percent and of productivity of 50 percent, with a consequent increase in employment of only 13.3 percent. It was pointed out by ORR at the time J that in view of the substantial increase in the population in the working ages this employment in S-E-C-R-E-T Approved For Release 1999/09/02 CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T crease could easily be exceeded if the situation required it. During the first 2 years of the period the economy followed the planned rate of expansion closely as production increased 30 percent and produc- tivity 17 percent, an annual average of 14 percent in production and 8 percent in productivity. From 1952 to 1953, however, the trend changed. Production increased only 11 percent,and productivity 6 percent. (See Fig. 1.*) The slackening was due in some measure to the disorganization following the death of Stalin and in part to the beginnings of a deliberate shift from the emphasis on high-produc- tivity industries to the development of low-productivity consumer goods production. The fact that the rate of increase in productivity slack- ened more pronouncedly than the rate of increase in production was attributable to the abnormally large increase in employment. Whereas it was originally planned to increase industrial. employment by 13.3 percent by 1955, it is estimated that employment exceeded this level by mid-1953. Several factors caused this rapid increase. Among them were the release of large numbers of forced laborers, a somewhat re- laxed policy.of discharges from the armed services, and probably a retention of larger numbers of women than originally contemplated. For the first part of the year, at least, transfers from farm to industry continued. On the assumption that the trends initiated in 1953 to im- plement the "new course" will continue in 1954 and 1955, it is esti- mated that the goal of.a 5-year increase of 70 percent in production will be practically attained. Owing partly to the more than planned increase in employment and partly to development of consumer goods production at an accelerated rate, productivity will not attain the planned goal of 50 percent increase over 1950. Table 2 indicates that, according to Soviet announcements for 1951, 1952, and 1953, Pro- ductivity increased only 25 percent over 1950 instead of the planned 28 percent. With slower increases in industrial production, produc- tivity increases will lag still further behind the planned rate. The projections of the official production increases divided by the CIA estimated employment increases will result in a 1955 productivity index of 136 percent of 1950 instead of the planned 150 percent, when calculated from the official production index, and of 128 percent when calculated from the CIA production index. (See Table 2 and Fig. 2.*f) Fig. 1 follows p. 8. P. 5, above and following p. 8, respectively. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T c. Future Prospects. When the trends of production and productivity are plotted ,as in Figure 2, a noticeable flattening out of the rates of increase appears after the sharp rise from 1948 to 1951. This deceleration of the rate of expansion is characteristic of economies after a period of rapid growth when previous gains must be consolidated and digested and when growth has attained such a level that further percentages of in- crease from the large base are more difficult than gains from a small base. It would be hazardous to extrapolate this slackening growth trend to 1960 or even to 1957 by mathematical formulae. There is reason to believe, however, that the favorable conditions operating during the Fourth Five Year Plan will not recur, nor does it seem likely that the Soviet people, after a few years of improvement in their level of living, can be "weaned" from the consumer benefits and forced to return to extreme emphasis on heavy industry without morale difficulties which would lower productivity. Thus continued increase in the proportion of workers assigned to the low-productivity industries would be a brake on the rate of expansion of total industrial produc- tivity unless capital investment in low-productivity industries is .sharply increased. On the other hand, some previously favorable factors will continue to militate against too rapid a drop in the annual in- creases in productivity. Among these are expanding programs for technical training at all levels -- on-the-job, vocational high school, and technical university. It is possible also that concentration of "know-how" on the consumer industries will produce improvements in physical plant, technology, and management in this sector comparable to past gains in the heavy industry sector. On balance, therefore, it would appear reasonable to expect a gradual decline in the rate of improvement in productivity from the present (1953 according to the official index) of about 6 percent per year. On the basis of some highly speculative reasoning, Galenson has arrived at an estimate (shown in Table 4*) of the relationship be tween productivity trends in the USSR and in the US. * Table follows on p. 9. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 0, A Approved For Release 1999/09/02 :,CIA-RDP79-01093A000500190004-0 SECRET SOVIET OFFICIAL INDEXES OF INDUSTRIAL PRODUCTION, PRODUCTIVITY, AND EMPLOYMENT 1940 =100 901 ! I I I I I 1948 1949 1950 1951 1952 1953 1954 1955 SECRET SOVIET OFFICIAL AND CIA INDEXES OF INDUSTRIAL PRODUCTIVITY 1940 =100 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 . S-E-C-R-E-T Table 4 Comparison of Productivity of Industrial Labor in the USSR and in the US 1950 and 1970 US Productivity=100 Assumed Annual Increase (Percent) Soviet Soviet Productivity Productivity US Soviet 1950 1970 1.5 3.5 4O 59 2.0 3.5 J-0 54 On Galenson's assumptions, it would appear that Soviet pro- ductivity will hardly reach two-thirds of that in the US but that the ratio will gradually become more favorable to the USSR. 3. Factors Affecting Soviet Labor Productivity and Its Measurement. Some conclusions may be drawn concerning Soviet efforts to in- crease labor productivity, but the evaluation of the success of their efforts and the impact of the various factors would require detailed analysis beyond the scope of this report. Doubts have been expressed concerning Soviet claims of produc- tivity increases because of the depressing effects of the destruction which occurred during World War II. However, an analysis of postwar changes in equipment and the utilization of equipment in blast and open hearth furnaces points out that the reconstruction of damaged installa- tions included modernization which would foster the growth of produc- tivity. 8/ It seems more than likely that reconstruction in other industries also entailed modernization. This would facilitate pro- ductivity increases, perhaps not always to the level of Soviet claims. Taken as a crude guide, the increased availability of equipment per worker should contribute to increased output per worker, although the relationship can not be measured. In 1950 the amount of technical S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093AO00500190004-0 S-E-C-R-E-T equipment* available per Soviet worker was approximately 53 percent over the 1940 level, and the electrical supply 10 was 50 percent over the 1940 level. By 1954, electrification per worker had increased an additional 25 percent to 28 percent over 1950. ** With the passage of time, the age and sex structure of the labor force is becoming more normal, with less dependence on lower productivity under- and over-age groups. Soviet emphasis in the post- war period on improved levels of training should also be contributing to increases in output per man as the relatively large numbers of new workers added to the industrial labor force through 1948 use competence they have gained through experience and on-the-job training. J 12 The proportion of personnel with higher and secondary technical training has also increased. By 1950 the number of such personnel had increased by 84 percent over 1940, compared with an increase of 24 percent in total nonagricultural employment. 13 Through 1955,'the former are expected to increase by an additional 70 percent and the latter by approximately 20 percent. 14 It is also reasonable to suppose that the quality of training has improved. The impact of these factors varies from industry to industry. It was first felt in those heavy industries where the investments were first made. The impact should be beginning in consumer goods industries, in which new plants have recently begun to operate and labor training plans have been expanded. The effect of management policies on labor productivity is even less tangible than the other factors. There is, however, no question that Soviet labor control policies are aimed at increasing labor pro- ductivity. Although both recurrent agitation for productivity con- sciousness and incentive provisions are utilized, the effects may be weakened by indifference or other morale factors. Management has also been criticized for failure to utilize available equipment and labor productively. 15 Increasing emphasis is placed on improved organiza- tion of work and the constant=flow method of production as sources of higher labor productivity. 16 Improvements in transport and communica- tions, and thus in supply, would contribute to productivity increases through elimination of work stoppages and erratic production. * The technical equipment index was calculated from the 1955 planned increase over 1940 and 1950. 9 ** Estimated from a speech by Saburov citing an increase of 34 percent over 1949. 11 S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T The usefulness of Soviet announcements concerning labor pro- ductivity has been questioned because it is not known what effect price changes may have had on the indexes. There is also the problem of making adjustments for longer hours worked since 1940, especially in comparison with the earlier periods for which there are concrete output-per-man data on an annual basis. For these and other reasons, the translations of Soviet indexes into absolute physical or monetary terms must be viewed with reserve, in the absence of supporting evidence. II. Individual Economic Sectors. This section describes the trends in some of the principal in- dustries and economic sectors. The level of productivity in these categories in 1953 as compared with 19+0 (abstracted from the sector sections) is shown in Table 5. Indexes of Labor Productivity in Selected Economic Sectors in the USSR J* 1953 19+0=loo Manufacturing (Producer Goods) Machinery and Instrument Building 256 Iron and Steel 184 Chemicals 175 Petroleum 124 Coal 110 to 112 Peat 109 Iron Ore Mining 100 Timber 96 Footnote for Table 5 follows on p. 12. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Indexes of Labor Productivity in Selected Economic Sectors in the USSR J 1953 (Continued) 1940=loo Consumer Goods Textiles 117 Services Construction 150 Rail Transportation 130 The extent to which the producer goods manufactures have been favored is immediately apparent from this list. This has taken the form of giving these groups highest priority in the assignment of equip- ment and skilled personnel. The construction and transportation cate- gories also show substantial advances. Next in order in the industrial categories are the consumer goods manufactures. Unfortunately textiles is the only group for which official figures are available, but scattered evidence indicates a similar trend in food processing. With the exception of petroleum extraction the slowest progress is shown by the extractive group. Analysis of the changes in production goals planned to build up the consumer goods industries indicates that the differential in production will be considerably narrowed by 1955. The effect this will have on productivity will depend on the ratios between capital and labor in- puts that are worked out. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T 1. Coal Industry. The study of output per man in the Soviet coal mining in- dustry has been relatively easy in the past because of the homoge- neity of product and relative availability of data. It is possible to construct several time series for output per worker from official sources. The variations arise largely from the use of employment data referring to different groups -- as to all workers, production workers, or underground workers. 17 The great need for rehabilitation of mines in the Donets Basin has impeded the recovery of the coal industry in that area. The increased proportion of production now furnished by fields in the eastern regions, where productivity is considerably higher because of the nature of the coal seams and the degree of mechanization, has off- set the lower productivity in the Donets Basin. 18 Increased mechanization also contributed to increasing output per man. By 1949 the cutting and breaking up of coal was 98 percent mechanized; the extraction of coal from the working face, 99 percent; and the loading of coal into freight cars, 98.6 percent mechanized. 19 By 1953, output per man per year had surpassed the prewar level by 10 to 12 percent, reaching approximately 351.6 metric tons to 405.2 metric tons. (See Table 6.**) 2. Peat Industry. Output per man in the Soviet peat industry was scheduled in the Fourth Five Year Plan to reach 192 metric tons per year in 1950; actual output per man in 1950 was 183.5 metric tons, or 103 per- cent of the 1940 level. 21 If output per man increased in the years after 1950 at the 1950 rate of 2 percent, 1953 output per man approxi- mated 195 tons. Annual output per worker in the peat industry in the USSR is shown in Table 7.3** Details on selected mines are given in source 20~/. Table 6 follows on p. 14. Table 7 follows on p: 14. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Table 6 Annual Output per Worker in Coal Mining in the USSR 1938-53 Year CIA Estimate (Metric Tons) Index (1928=100) Galenson (Metric Tons) Index (1928=100) 1938 288.0 a/ 205.5 326.0. 226.3 1939 303.6 216.7 343.6 J 238.5 1940 312.0 222.6 352.8 J 244.9 1947 221.0 J 157.7 257.5 J 178.7 1948 250.0 178.4 290.9 J 201.9 1949 272.0 aJ 194.1 316.5 J 219.6 1950 300.0 214.1 345.7 a/ 240.0 1951 323.0 J 230.5 371.9 / 258.2 1952 335.9 e/ 239.7 386.7 / 268.5 1953 351.6 J 250.9 405.2 J 281.3 a. 22/ b. 23 c. Projected at same rate of increase as CIA estimate. d. Projected from plan fulfillment announcement. 4 e. Official plan fulfillment report. L5/ f. 26 Annual Output per Worker in the Peat Industry in the USSR 27 J 1945-53 Index Year Metric Tons . 1940=100) 1945 100 56.2 1946 122 68.5 1947 140 78.5 1948 150.8 84.7 1949 179.6 100.9 Footnotes for Table 7 follow on p. 15. - 14 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T 1945-53 (Continued) .Year Metric Tons Index (1.940=100) 1950 183.5 103 1951 187.1 105 1952 J 190.8 107.1 1953 194.6 109.2 Annual Output per Worker in the Peat Industry in the USSR L7/ a/ a. The data may apply only to Glavtorf of the Ministry of Electric Power Stations, b. At annual rate of increase of 2 percent. By 1950, as shown in Table 8,* output per man in the Soviet petroleum industry had regained the prewar level. Assuming no in- crease in 1940 over the 1938 level of output per man, 28 the index for 1953 indicates that output per man approximates 90 metric tons of petroleum per year, or 1,484 metric tons of petroleum and gas com- bined. Many instances of increases in labor productivity are cited as resulting from improved organization of labor and production. 29 4. Ferrous Metallurgy Industry. Plan results indicate that labor productivity in the iron and steel industry exceeded the 1940 level by 31 percent in 1950 and 65 percent in 1953. 30 Labor productivity in blast and steel furnaces increased at a more rapid rate. 31 It appears that the in- dex for the industry as a whole was lower because of low rates of .increase in productivity in iron ore mining, and perhaps in casting * Table 5 follows on p. 16. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Table 8 Index of Output per Worker in the Petroleum Industry in the USSR 1949-53 1940=100 Year 1949 1950 1951 1952 5/ 1953 e/ 95.0 103.6 113.0 118.6 124.5 a. Estimate. 2 b. Estimate. c. Estimate. d. Estimate. e. Estimated on the basis of the previous year. and rolling. Changes in labor productivity in the industry are shown in Table 9. Table 9 Indexes of Output per Worker in the Ferrous Metallurgy Industry in the USSR 1948-53 1940=loo L6/ Pig Iron Steel Year Industry Total Ore Mining ~6 Smelting Smelting 1948 106.2 37 1949 121.0 1950 131.0 39 100 1951 142.8 / 100 161 41/ 161 S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Table 9 Indexes of Output per Worker in the Ferrous Metallurgy Industry in the USSR 1948-53 (Continued) 1940=100 Year Industry Total Ore Mining L6/ 1952 154.2 42 100 1953 164.9 100 Pig Iron Steel Smelting Smelting 174 J 174 184 J 184 a. Projected at the same rate as all metallurgy. b. Estimated on basis of previous years. a. Iron Ore Mining. In 1937, iron ore output per worker was reported as 904.6 metric tons per year. 43 The 1940 productivity level of 1,000 metric tons per worker per year may now obtain and may be ex- pected to remain unchanged, even with improved techniques, because of the declining share of open pits in total output. 44 Increased dependence on the utilization of poor-grade ores will require an in- crease in concentrating operations, and to that extent lower Soviet productivity in terms of ore ready for use in the blast furnace. L5/ b. Pig Iron Smelting. For 1937 there are 2 Soviet figures for metric tons per worker per annum, 756 46 and 801.2 L7/, the latter presumably based on the smaller figure of workers directly employed. In 1951 the productivity of labor in blast and steel furnaces was reported to have increased to 161 percent of the 1940 level. 48 Even assuming no in- crease in productivity in 1940 over 1937, the 1953 output per worker is indicated as 1,391 metric tons or 1,474 metric tons.* 1937 output per man is projected by the index in Table 7. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Contributing to the increase in labor productivity, the utilization of area of blast furnaces had increased in 1950 by 25 per- cent over 1940. 49 c. Steel Smelting. In 1937, output per worker in open-hearth shops was re- ported as 400metric tons of steel per annum. 50 Using the same projection as above, steel smelted per worker in open-hearth shops in 1953 would approximate or exceed 736 metric tons per year. In open-hearth shops, the utilization of equipment had also increased, so that the removal of steel per square meter of hearth area exceeded the 1940 level in 1950 by 33 percent. 51 d. Casting and Rolling. No data were found to bring output per man in casting and rolling up to date. In 1937, rolled output per man was 163 metric tons, and cast iron, 756 metric tons. 52 5. Timber Industry. By 1950, labor productivity in the timber industry was scheduled to increase by 54 percent over the 1940 level in logging and by 30.5 percent in manufacturing or to 2,$52 rubles and 12,176 rubles per manyear, respectively. 53 In physical terms, output per man in logging in 1953 was 96 percent of the 1940 level in spite of increased mechanization, re- portedly as the result of the incorrect utilization of both men and equipment. 54 In Primorskiy Kray and Sakhalin Oblast, output per registered worker in terms of timber hauled was less than 1 cubic meter per day in 1953. L5/* The average for the whole USSR may have been little higher, judging from the blanket criticism referenced above, and other reports. L6/ In the next 2 or 3 years, output per worker per day is scheduled to be increased to 1.5 to 2 cubic meters in the Far East, * This relationship measures the total efficiency of the logging unit, in contrast to the measurement of the productivity of workers in each of the activities of a logging unit; that is, felling, skidding, and hauling. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T and presumably throughout the USSR. 57 Achievement of this goal would probably approximate the goal originally set for 1950. 6. Cotton Textiles Industry. Under the Fourth Five Year Plan, by 1950 the productivity of workers in the textiles industry was scheduled to increase to 127.3 per- cent of the 1940 level and to 161.8 percent of 1945. 58 At the same time, the productivity of equipment in various sectors of the textiles industry was to increase by from 14 to 42 percent, bringing output per unit slightly above prewar levels. W It will be seen from Table 10 that, if the estimated rates of increase in labor productivity to 1953 were achieved, the level of Indexes of Output per Worker in the Cotton Textiles Industry in the USSR 1946-53 1940=1000 Year Spinning Weaving Combined _a/ 1946 J 89.2 67.2 70 1947 J 82 67.0. 70 1948 loo 81.0 86 1949 J 106 94.7 100 1950 of 110 99.4 105 1951 114 104.0 109 1952 J 117 109.0 113 1953 J 120 114.0 117 a. Estimated between spinning and weaving indexes. b. In,view of the data for thepprevious year, these figures may be erroneous. 60/ c. Interpolated between 1947 and 1949. d. Estimated from the reported increase in 1949 over 1946*of 19 percent in spinning and 41 percent in weaving. 61 e. Estimated on the basis of prewar rates of increase. 62 - 19 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T labor productivity was still below the original 195-Q goal. Present annual output per worker in cotton textiles may be as high as 10,000 metric tons.* In spinning a level of 97.2 kilogram-numbers per man per hour may have been attained and in weaving, 12.5 meters per man per hour, depending on the average density of yarn.** 7. Chemicals Industry. During the Fourth Five Year Plan (1946-50), output per worker in the Soviet chemicals industry was scheduled to increase by 43 percent over the 1940 level. !L5/ The 20-percent overfulfillment of the production goal in that period suggests that the productivity goal may have been attained, especially considered in conjunction with the annual rates of increase in productivity in 1950 and subsequent years of 14, 9, and 8 percent. 66 Sulfuric acid is the only individual product for which both prewar and postwar data on output per worker could be found. The post- war data are for 1945 and pertain to only 2 plants, where output per man appeared to approximate the 1936 level of 314 tons per year. L7/ The reported increase in average daily output of sulfuric acid per cubic meter of tower from 40 kilograms in 1940 to 200 kilograms in 1949 should have contributed to a considerable increase in output per worker. 68 8. Soviet Metal-Fabricating Industries. Labor productivity in the Soviet metal-fabricating industries is generally reported to be considerably above prewar levels, which were regained in 1946 and 1947.. Although the degree by which the pre- war levels are exceeded is' almost unquestionably lower in terms of physical units than in terms of value, the complex nature of the pro- duction of these industries makes comparison difficult because of the problems of measurement in physical terms.*** Nevertheless, data * Projected from prewar base. 63 ' ** Projected from 1940 base. 64 xXx For example, the Molotov. construction machinery plant at Dnepropetrovsk reported a 66-percent increase in productivity from 1940 to 1950 in value terms, and a 25-percent increase in physical terms. 69 S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T showing changes in-World War II labor inputs into certain war ma- terials, if accurate, indicate that the percentage increases in pro- ductivity cited in the same source were only to a small extent the result of increases in monetary value.* 70. At any rate, significant advances in productivity in Soviet metal-fabricating industries should have resulted from the priority given them in investment and the higher ratios of equipment to workers than in other industries. The increase in the machine tool pool, with the. addition of more productive equipment is also cited by many sources. Some indications are given of increases in labor productivity in individual plants resulting from new equipment and from improved production methods. 72/ As an example of Soviet productivity claims in the field of metal fabricating, the index for the then Ministry of Machine and In- strument Construction is given in Table 11. Index of Labor Productivity in Machine and Instrument Construction in the USSR 1948-53 1940=loo 1948 a/ 138.0 1949 J 158.7 1950 a/ 188.8 1951 b 215.2 1952 c/ 236.7 1953 / 255.6 a. 73 b. c- 75 d. Estimated from previous year. Voznesenskiy's labor inputs for weapons were compared with US in- puts. 71 The US-USSR ratio of inputs for small arms appeared reason- able, but Soviet artillery inputs were about half those for the US. - 21 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T locomotives similarly indicate an increase in labor productivity of about 20 percent,* but the inputs cited -- 250,000 hours -- are so high that they must be regarded as erroneous. 89 d. Oil Machinery Industry. Labor productivity in oil machinery production reportedly more than doubled in 1949 compared with 1946. 22/ This would tend to indicate that productivity in 1949 was at least 150 percent of that in 1940, and if the 1946 level were equal to 1940, that 1950 was more than 200 percent of the 1940 level. This rate of increase appears possible in the light of increases in productivity in other branches of machine building and the trebling of the production of 'oil ma- chinery compared to 1940. 91 9. Railroad Transport. The productivity of railroad operating personnel in 1950 slightly exceeded the plan goal and, as indicated in Table 13,X- in- creased almost 10 percent over the 1940 level. 92 Output per opera- ting employee is measured in terms of composite ton-kilometers; that is, of freight, passenger, and baggage movement. In 1949 the unit of measure was changed from operating ton-kilometers to tariff-ton- kilometers.X-* 94 This had a depressing effect on the index. The railroads in the territories incorporated into the USSR in the west have exerted a continuing downward pull on the national productivity index, but this might be changed by significant increases in traffic volume; since productivity appears to vary with traffic volume.X-)f* * Using the same source which was used to derive the man-hour in- puts into 2-axle freight cars, steam locomotives would require about 27,300 man-hours,and electric locomotives, about 39,000 man-hours, if Soviet productivity were 66 percent of US productivity. Table 13 follows on p. 25. *** An operating ton-kilometer is in terms of distance actually covered; a tariff ton-kilometer, the basis of freight charges, is based on the shortest routes possible, given existing track. The effect of this change in the USSR.is given in source 93 XXXX For a further discussion, see source 95 S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Table 13 Output per Worker and Index of Output per Worker in Railroad Transport in the USSR 1945-53 Year Index (1940=100) Output (Thousand Ton-Kilometers) 1945 96 75.6 275.4 1946 7 68.0 248.0 1947 98 80.0 291.0 1848 99 91.7 334.0 1949 loo 102.5 374.0 1950 1 1 109.8 400.0 1951 116.4 424.0 .1952 J 124.0 452.0 1953 J 130.0 473.0 a. Calculated from a 61-percent increase during the Fourth Five Year Plan. 9 b. Interpolated between 1950 and 1952? c. Calculated on the basis of a 13-percent increase over 1950. 102 d. Projecte at a lower rate (5 percent) than for 1952. .10. Construction. The index of labor productivity in Soviet construction which can be established from plan fulfillment data, shown in Table 14,* indicates a continued failure to attain plan goals in spite of addi- tional mechanization. 103 The Fourth Five Year Plan goal for 1950 was 140 percent of 1940 productivity and 172 percent of 1946, as compared with the level achieved in 1950 of 123 percent of 1940.'104 The increase planned for 1955 over 1950 was 55 percent. 105 Con- sidering the achievements through 1953, the level attained in 1955 will not be much more than 130 percent of 1950. Table 1 follows on p. 26. S-E-C-R.-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T Table 14 Index of Output per Worker in Construction in the USSR 1946-53 Index Year 1940100) 1946 of 81.4 1947 90.3 1948 J 100.0 1949 c/ 111.0 1950 108 123.0 1951 109 134.7 1952 110 144.1 1953 111 150.8 a,. Calculated from index of 1950 over 1940 and over 1946. 106 b. Calculated on the basis of an 11-per= cent increase over 1946. 107 c. Interpolated between 19 7 and 1950? In 1946-47, the output per man-year in construction instal- lation work was about 22,500 rubles. By 1953 it had risen to an estimated 41,400 rubles.* * One source 112 gives 13,000 man-days of labor in basic work per million rubles worth of construction and installation work, or 76.9 rubles per man-day. At 283 days per year, calculated from the 1941 Plan, this is 22,500 rubles per man-year. This figure was projected to 1953 by using the index in Table 14. These figures are probably in 1945 rubles, which were being introduced for use in construction estimates at this time. This view is reinforced by the fact that the man-day ruble output calculated from it exceeds 1940 data (in 1926-27 rubles) by 17.2 percent, whereas the index in Table 14 shows 1947 as 90.3 percent of the 1940 level (1940 data were calculated from the 1941 Plan). S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T APPENDIX A METHODOLOGY 1. General. Since labor productivity is a ratio derived by dividing produc- tion units by employment units, the significance of the ratio is affected: a. By any unreliability of the production data or crudity in the statistical procedure adopted for aggregating individual products in- to combined indexes of production; that is, in aggregating the pro- duction of various chemicals into a representative chemical index. b. By any unreliability of the employment data or any inappropriateness of the employment series for the purpose intended. 2. Measures of Production. It is generally agreed that Soviet published basic data on physical volume of production before 1937 were reliable and published in sufficient detail to constitute the basis of significant measures. Soviet value indexes, however, using 1926-27 ruble prices to calcu- late total value, gave a grossly exaggerated picture of production increases because they gave inflated values, because new products were artificially "priced in" by procedures which exaggerated their effect, and because they duplicated the value of products which are re-used in fabrication. 113 This latter problem arises when a basic product is used in producing a finished product, such as when pig iron is fabri- cated into steel end items. A gross value index would include the value both of the iron and of the fabricated steel, thus duplicating the value of the pig iron. The difference of prewar productivity indexes based on value from those based on physical volume is shown in Table 15.* 114+ * Table 15 follows on p. 28. - 27 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A0.00500190004-0 S-E-C-R-E-T Indexes of Production in Selected Industries in the USSR 1934 1928=100 Indexes Industry Based on Volume Based on Value Coal Mining 264 262 Iron Mining 310 359 Petroleum 211 196 Iron and Steel 245 300 Cotton Cloth 104 133 Electric Power 420 622 An additional estimate of the difference between volume indexes and value indexes is furnished by Hodgman 115 by comparing the Soviet official gross value index with an estimated physical volume index. This shows an advance in the official (value) index from 1934 to 1937 of 80 percent as against only 62 percent in Hodgman's calculated index. Because of these difficulties which underlie the Soviet official index of production before 1937, no attempt is made in this study to analyze trends before 1940. The major analysis centers on the period 1946-53. The indexes are based on the year 1940 in order to tie the current period to the level attained just prior to World War II. No attempt is made to trace the trends in the abnormal war years from 1940 to 1946. b. After 1940. Postwar Soviet official figures relating to the trend in production are probably less exaggerated than prewar series, but there is some controversy as to the extent to which the methodological pro- blems have been eliminated. The indications of improvement are: In 1936, after widespread criticism of the official series based on gross value in 1926-27 rubles, new pricing procedures were recommended. These were based on new current price schedules, and S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved for Release 191 910910 "C11JR"DP 79-O1T 9 A000500190004-0 8er1 CIA /RR PR Nui nb r? GIA/RR_. PR - 6 8 Lc~_ r,t 9 Aug 54 25 Aug 54 25X1 A9a is j / a 25X1A9a $_ 25X1A9a 1 r _ _111 3 s -4f - 25X1 A9a--- Jj- 25X1 A9a/_3/ AAZVVAL~ 25X1 A9a Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T the inflation which had been introduced by the previous system of pricing in new products was minimized. It seems probable, however, that the present system of weighting commodities is not strictly based on current prices. Otherwise, the price reductions of recent years would probably have had a depressing effect on the productivity index. A second effort at improvement has been the tendency to dis- card the gross value principle in favor of some weighting system based on the net value added. Industry manuals available to CIA, 116 which contain quite specific instructions as to methods to be employed in the statistical reporting of production, place emphasis on the net value principle. It should be emphasized that the Soviet production and produc- tivity claims which are the backbone of this report, are from published figures and that information is lacking as to how the production and productivity reports required by the manuals mentioned above are pro- cessed to produce the official published index. In the absence of such knowledge, about all that can be said is that Soviet production figures on which productivity estimates are based provide the only means of attempting to fix the general order of magnitude of the ex- pansion of the Soviet economy. Since the absence of other data has led all analysts of in- dustrial trends in the USSR to base their conclusions on Soviet produc- tion figures, the principal differences in the measures computed arise not from differences in facts as to the volume of production of individual commodities but from methodological differences in the statistical procedures employed to build up aggregate indexes. In order to provide some independent check on the Soviet official index, productivity has been calculated from 2 other production indexes, using the same employment series in all 3 indexes. This comparison, shown in Table 2, brings out the differences between the Soviet official index, Hodgman's index, and the CIA index. The differences shown arise mainly from differences in coverage and differences in statistical method. The two non-Soviet indexes are based insofar as possible on physical production statistics combined insofar as possi- ble with estimated value-added weights. The number of products in- cluded is different, and it is apparent that both independent indexes are less comprehensive than the Soviet official index, which is probably based on fairly complete coverage. This comparison is presented not in order to rate one measure or the other measure as superior but to point out the divergence which can arise from different uses of the same data - 29 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T and to indicate the general agreement in all three as to the existence of a pronounced upward trend even though the steepness of the three curves varies. Table 2 does not show the differences in the production in- dexes from which the productivity indexes are derived. This com- parison is shown in Table 16. Table 16 Indexes of Industrial Production in the USSR Selected Years, 1940-53 1940=100 Year Hodgman CIA Soviet Official 1940 100 100 100 1948 108 99 117 1951 172 158 200 1952 N.A. 174 222 1953 N.A. 190 249 It will be observed that since 1948 there has been substantial agreement between the CIA index and the official index, the former increasing 92 percent and the latter 110 percent from 1948 to 1953. 3- Measurement of Employment. The employment component of the productivity index is not subject to the :same statistical difficulties as the production com- ponent. It is highly probable that the employment figures used represent production workers only, the definition being very similar to that of production workers in US statistical usage. For some purposes it would be revealing to have a comparative index based on total employment, thus including the bureaucracy and nonproducers. The tendency to overstaff the nonproductive jobs has at various times led to severe criticism of the system of manpower utilization, and for this reason a measure which would reflect the fluctations in this nonproductive group would give some clue as to waste of manpower. Non- S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T productive employment cannot, however, be derived from available material, and information on this subject is therefore of an indirect and qualitative nature. A second unsolved question relates to the type of average which is used for reporting employment. This, however, should not affect the trend of an index unless the definition were changed during the period covered. A more serious statistical flaw in the productivity measures probably arises from the system of reporting the inputs of slave and prisoner-of-war labor. It appears from the behavior of some of the industry indexes during periods when prisoners of war were being re- patriated that the output of this group was included in the production series but that their labor input was excluded. For the purpose of indexing productivity, a particularly appropriate method is to disregard value and to weight indexes of physical volume by the size of the labor inputs used. This would take the following form for an individual industry: Index of Labor Productivity (Ilp) = Output per man in given year (1)= Output per man in base year (0) Ph sical Volume of Production (1) Employment (1) Physical Volume of Production (0) Employment (0) The aggregate for industries I' + I" + In would then take the form: n n Aggregate relative = Itlp E' ? I"lAE" + IlpE Total Employment Such an index has technical advantages as a productivity measure, the principal one being that it is unaffected by changes in the price level. It may be interpreted as follows (to use the simplest case when the number of workers is constant): If the output per worker of 1,000 workers in industry I' increases to 110 percent of the base year and the output per worker of 100 workers in industry I" S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T increases to 150 percent, then the aggregate productivity of the 1,100 workers increases as follows: (110 x 1,000) + (150 x 100) = 114 per- cent. 1,100 An index of this type was calculated by the Central Statistical Office from 1943 to 19+8 117 except that production may have been ex- pressed in value terms. There is, however, ,no evidence that it was published. Its abandonment was recommended in 1948, at which time the stated reason was that it did not yield results sufficiently different from the older method to warrant its use. It would appear, however, that an additional reason was that it did not paint a sufficiently optimistic picture of the increase in productivity. Regardless of whether the Central Statistical Office still uses this principle of aggregation, some of the manuals examined recommend it for the aggregation of products in multiproduct plants, and the planners may base their reasoning as to productivity on such calcula- tions. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T APPENDIX B GAPS IN INTELLIGENCE Information is lacking as to the components of the Soviet general index of industrial productivity and as to its method of compilation. It is not known whether the Central Statistical Office divides the in- dustrial production index by an employment index or whether it compiles a productivity index directly from plant and ministry reports. It is believed, but not certain, that coverage is industry-wide and not selective. There is no way of measuring the extent to which production figures are inflated by the inclusion of unfinished or defective material, but scattered evidence indicates that this is a factor. An index would not, of course, be affected by such inclusion if the proportion re- mained constant. There is reason to believe, however, that the amount of waste in industry in the USSR has been reduced. The extent of the inclusion of the production of prisoners of war and slave labor is not certain. Although it is fairly clear that Soviet productivity calculations are based on production workers only, no statistical information is available on nonproduction employees. An index based on the total production and nonproduction employees would be influenced by changes in over-all efficiency and would give valuable information on bureaucratic waste of manpower. Study should be devoted to the managerial contributions to efficiency. Specific information is lacking on productivity in food processing, and information is spotty on chemicals. Facts as to productivity in water and road transport are not sufficient to construct an index. Information is lacking on some sectors of metal fabrication, electric power, and communications. The extent to which the productivity figures announced for in- dustry groups cover all the products of a ministry or only the prin- cipal products is not known. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T APPENDIX C SOURCES AND EVALUATION OF SOURCES 1. Evaluation of Sources. Evaluations, following the classification entry and designated "Eval.," have the following significance: S ource of Information A - Completely reliable Doc. - Documentary B - Usually reliable 1 - Confirmed by other sources C - Fairly reliable 2 - Probably true D - Not usually reliable 3 - Possibly true E - Not reliable 4 - Doubtful F - Cannot be judged 5 - Probably false 6 - Cannot be judged 25X1A5a1 "Documentary" refers to original documents of foreign governments and organizations; copies or translations of such documents by a staff officer; or information extracted from such documents by a staff officer, all of which will carry the field evaluation "Documentary" instead of a numerical grade. Evaluations not otherwise designated are those appearing on the cited document; those designated "RR" are by the author of this report. No "RR" evaluation is given when the author agrees with the evaluation on the cited document. 2. Sources. 1. 2. A. Bergson, Soviet Economic Growth. U. Eval. RR 2. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T 3. CIA/RR-23, The Economy of the Soviet Bloc: Production and 1957 Potential, 20 May 1953. S. CIA IM-383, The Implications of the New Soviet Economic Policy, 30 Dec 1953. S. 4. Bergson, op. cit., p. 236. FOIAb3b1 5. 6. CIA/RR-23, op. cit. 7. CIA/RR IM-37, Manpower Aspects of the Soviet 1951-1955 Five Year Plan, 15 Sep 1952. C. 8. Bergson, op. cit. 9. Planovoye Khozyaystvo, No. 4+, 1953, PP- 32 ff. Eval. Doc. 10. CIA FDD, U-2529, Planovoye Khozyaystvo, No. 1, L. Volodarskii, "Steady Growth of Labor Productivity in the Socialist In- dustry of the USSR," 1952, p. 8. C. Eval. RR 2. CIA FDD, U-2761, The Productivity of Labor in USSR Industry and Ways of Increasing It, 31 Dec 1952. C. Eval. RR 2. K.I. Klimenko, Puti i reservy pov sheni a proizvoditel'nosti F OIAb3 b1 truda v. promyshlennosti SSSR, 1951, p. 14. U. Eval. RR 2. 12. CIA/RR PR-32, op. cit. CIA/RR PR-16, Goals and Attainments of Education in the USSR, FQ1952. C. F OIAb3 b1 14. CIA/RR PR-32, op..cit. 15. CIA FDD, U-2761, 31 Dec 1952. C. Eval. RR 2. 16. CIA FDD, U-5669, USSR Data on Labor Productivity Output Norms and Productivity Potential. C. Eval. RR 2. 17. CIA/RR-28, Solid Fuels in the USSR, 29 Jan 1954, p. 159. S. 25X1 A5a 1-^ US OFFICIALS ONLY. 18. 19. 25X1A2g 20. 21. CIA RR 28, op. cit. CIA FDD U-5269 op. cit. p. 12. Peat Industry, No. 5, 1948. U. Eval. RR 2. Peat Industry, No. 1, 1951. U. Eval. RR 2. 22. CIA/RR 28, op. cit., p. 160-. 25X1A5a1 23. 36 S -E -C -R -E -T Approved For Release 1999/09/02 CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T FOIAb3b1 25X1A2g1 24. Vestnik Statistiki, No. 1, 1953, P. 15. Eval. Doc. 25. Vestnik Statistiki, No. 1, 1953, P. 15. Eval. Doc. 26. Pravda, 2 Apr 1954. U. Eval. RR 2. 27. Through 1947: Peat Industry, No. 5, 1948. U. Eval. RR 2. 1948-50: Peat Industry, No. 1, 1951. U. Eval. RR 2. 28. CIA FDD, U-5669, op. cit. 29. CIA FDD, u-4212, 27 Jul 1953. C. Eval. RR 2. CIA FDD. U-4213, 27 Jul 1953. C. Eval. RR 2. CIA FDD, U-2529, op. cit., p. 10. Ibid. Planovoye Khozyaystvo, No. 1, "1951 Plan Fulfillment," 1952. C. Eval. RR 2. Ibid. Izvestiya, 13 Dec 1951. U. Eval. RR 2. 25X1A2g 25X1A5a1 25X1 A5a 1 37. 38. 39. FOIAb3b1 40. Planovoye Khoz a stvo, No. 1, 1952. U. Eval. RR 2. 41. CIA FDD, U-4950, 30 Oct 1952, p. 12. C. Eval. RR 2. FOIAb3b1 42. 43. CIA FDD, u-4950, 30 Oct 1953, p. 12. C. Eval. RR 2. 25X1A5a1 44. _ 45. Ibid. FOIAb3b1 46. M. Demchenko, Puti pov sheni a proizvoditel'nosti truda v sotsialisticheskoy promyshlennosti, 1950, p. 6. U. Eval. RR 2. 47. N.S. Maslova, Proizvoditel'nost truda v promyshlennosti SSSR, 1949, p. 50. U. Eval. RR 2. 48. CIA FDD, U-4950, 30 Oct 1953, P? 11. C. Eval. RR 2. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T FOIAb3b1 25X1 A5a160. 54. 49. CIA FDD, U-2529, op. cit., p. 12. 50. Maslova, op. cit., p. 50. 51. CIA FDD, U-2529, op. cit., p. 12. 52. CIA FDD, u-4950, 30 Oct 1953, P. 11. C. Eval. RR 2. 53. Lesnaya Promyshlennost', Aug-Sep 1946. U. Eval. RR 2. 56. Plan," Tekstilna a Pro shlennost', No. 6, 1946. C. Eval. RR 2. 59. CIA FDD, U-3 2 "The Five Year Plan -- the Basis of the 25X1A2g 58. CIA FDD, U-3426, "Tasks of the Textile Industry in the New Five Year Plan and the Fulfillment Guaranty of the 1946 61. Voprosy Ekonomiki, No B, 1950, p. 47- 62. CIA FDD, U-3427, "Increase of Equipment Productivity is the Key to Production Volume," Tekstilnaya Promyshlennost', No. 6, 1946. C. Eval. RR 2. 63. Vladimirov, Proizvoditel'no rabotat' vse 480 minut, 1940, p. 16. U. Eval. RR 2. 64. CIA FDD, U-1782, "Development of the Cotton Industry in the USSR, 1952." C. Eval. RR 2. 65. Khimicheskaya Prom shlennost', No. 1, 1947. U. Eval. RR 2. 66. 1951: Planovoye Khozyaystvo No. 1, 1952. U. Eval. RR 2. Flourishing and Prosperity of Our Country," Tekstilnaya Prom shlennost' Nos. 4 and , 1946. C. Eval. RR 2. CIA FDD, U-3689, op. cit. FOIAb3b1 FOIAb3b1 - 38 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 S-E-C-R-E-T 25X1A2gD 25X1A2g 72. CIA FDD. U-2529. op. cit. 67. Proizvoditel'nost truda v promyshlennosti SSSR, 1940, p. 248. U. Eval. RR 2. Khimicheskaya Promyshlennostt, No. 6, 1945. U. Eval. RR 2. 68. K. I. Klimenko, op . c it . 69. Bergson, op. cit. Trud, 24 Mar 1951. 70. N. Voznesenskiy, The Econo of the USSR during World War II, Public Affairs Press, 1946, p. 61. U. Eval. RR 3- 71. CIA/RR 47, Inputs for Peacetime Production of Small Arms, Mortars, and Artillery Pieces, 29 Jan 1954, pp. 21-22. S. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 25X1A2g 84, Bergson, op. cit., p. 209. Planovove Khozyaystvo, No. 1, 1952. U. Eval. RR 2. . 64. U. Eval. RR 2. Ibid. CIA RR 26, The Antifriction Bearings Industry in the Soviet Bloc, 30 Oct 1954, p. 100. S, US OFFICIALS ONLY. Ma s lova, oop. cit., p. 164. u. Eval. RR 2. Avtomobil naya i Traktorna a Prom shlennosti, No. 3, 1947, No. ' (, 1944, No. 12, 194d. U. Eval. RR 3. Voznesenskiy, op. cit., p. 61. Contribution to ORR, Project 10.122, unpublished. S. FOIAb3b1 86. Khromov, Pr oizvoditel'nost truda v promyshlennosti SSSR, 1940, p. 204. U. Eval. RR 2. 87. Narodnoye Khozyaystvo SSSR, No. 3, 1950, pp. 168-178. U. Eval. RR 2. 88. CIA/RR 27, Production of Locomotives and Rolling Stock in the USSR and European Satellites, 31 Dec 1953. S, US OFFICIALS ONLY. 89. CIA FDD, U-4104, 15 Jul 1953, Khochaturov, Railroad Transport in the USSR, 1952, p. 126. C. Eval. RR 4. 90. Izvestiya, 22 Jan 1950, Baybakov, Survey of the Oil Industry. U. Eva!. RR 2. S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 CIA-RDP79-01093A000500190004-0 FOIAb3bl S-E-C-R-E-T 92. Zheleznodorozhnyy Transport, No. 2, 1947, p. 28. U. Eval. RR 2. Gudok, 31 Dec 1950, p. 3. U. Eval. RR 2. 93. A. Redding, "Employment and Productivity in USSR Railroads 1928-1950," Soviet Studies, No. 1, Jul 1953. U. Eval. RR 2. 94. A. Galitskii, Planirovaniye Sotsialisticheskovo Transporte, 1950, pp. 1149-150. U. Eval. RR 2. 4 95. 96. 1. Redding, op. cit., p. V. Umbiliya, Osnov organizatsi normirovani.a i planirovaniya FOIAb3bl na zheleznodorozhnom trans orte 1947, p. 16. U. Eval. RR 2. 97. 98. Gudok, 14 Jan 1954, p. 1. U. Eval. RR 2. 99. Gudok, 19 Jul 1950, p. 2. U. Eval. RR 2. 100. Ibid. 101. Gudok, 31. Dec 1950, p. 3. U. Eval. RR 2. FOIAb3bLt2. 103. 104. CIA FDD, U-2322, Basic Problems in Complete Mechanization of Construction, 27 Aug 1952. C. Eval. RR 2. CIA FDD, U-3378, Problems of Unions in the New Five Year Plan F OIAb3 bl in the Field of Mechanization, 27 Apr 1953. C. Eval. RR 2. 105. 106. CIA FDD, U-2322, Basic Problems in Complete Mechanization of Construction, 27 Aug 1952. C. al. RR 2. CIA FDD, U-3378, Problems of Vnioms in the New Five Year Plan- F OIAb3 bl in the Field of Mechanization, 27 Apr 1953. C. Eval.RR 2. F OIAb3 bl 107. CIA FDD, U-3378, 23 Apr 1953. C. Eval. RR 108. 109. Planovo e Khoz aystvo, No. 1, 1952. U. Eval. RR 2. FOIAb3bl 110. ill. 112. CIA FDD, U-3378, 23 Apr 1953? C. Eval. RR 2. 113. D.R. Hodgman, A New Production Index for Soviet Industry, 25X1 A5a 1 Cambridge, 1950. Eval . RR 2. A. Gershenkron, A Dollar .In ex of Soviet Machinery Output, 1952. 25X1A5a1 - 40 - S-E-C-R-E-T Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 E'pE CIA/RR 23, op. cit., Appendix C. Symposium of the American Statistical Association, 1952. 114. Socialist Construction in the USSR, 1936, Moscow, 1936. Eval. Doc. 115. Hodgman, op. cit. 116. CIA FDD, U-56 16 Mar 1954. C. Eval. RR 2. CIA FDD, U-4950, 30 Oct 1953. C. Eval. RR 2. 25X1A5a1 102 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 Approved For Release 1999/09/02 : CIA-RDP79-01093A000500190004-0 SEC R Approved For Release 1999/0 2: CIA-RDP79-01093A000500190004-0