Documents / FOIA release
This Joint Committee Print, dated December 8, 1982, gathers studies that the Central Intelligence Agency's Directorate of Intelligence prepared for the Joint Economic Committee of the US Congress. It gives estimates of Soviet gross national product for 1950 to 1980, with indexes of industrial production, agricultural production and consumption, and explains the methods and data behind them. The foreword says official Soviet statistics inflate growth and that the CIA measures offer a more accurate picture. The document contains no UFO material.
“Gross”60+ pages
Approved for Release: 2019/07/19 C05210421 products. The purpose of Bergson’s adjusted factor- cost standard (AFCS) is to adjust Soviet prices so that they more closely approximate the theoretical stand- ard. This section first examines the basic nature of Soviet prices and then describes Bergson’s AFCS, its justification, and its limitations. Soviet Established Prices In most countries, GNP is computed only in terms of market prices. The related prices in the Soviet Union are the so-called established prices.“ Most prices in the Soviet Union are established by administrative decision rather than by market forces. They are intended to cover material costs, wages, depreciation allowances, social security allowances, other direct costs, and a profit surcharge—in other words, average cost plus a profit markup. While the profit surcharges are intended to average about 15 percent of the stock of fixed and working capital, in practice they are computed as a percentage of input costs. The costs computed are those that would be incurred by an average enterprise producing according to required standards and following normal procedures, rather than the actual production costs of any one enterprise. Thus some enterprises should make above-average profits because of better-than-average production con- ditions, while other enterprises will make less-than- average profits or even losses. This method of price formation, however, does not apply to all prices. Agricultural prices include a bewildering array of procurement, above-plan procurement, direct deliv- ery, zonal, and collective-farm-market prices. The construction industry does not have a standard prod- uct; hence, its prices are formed on a cost plus basis for each construction project. The profits included in Soviet prices are intended to cover the normal uses to which an enterprise is allowed to put its profits while leaving enough for the needs of the state budget. Since the economic reforms in the late 1960s, the enterprises have been allowed to form increased material incentive and other funds from profits and have had to pay a charge to the state for the use of enterprise capital stock. The allowance for profits has, therefore, been increased. “' The term “prevailing prices” is also used in Western literature. See Bergson, 1961. Established prices in the USSR have several aspects that make them unsuitable as weights in computing the real growth of the Soviet economy. These aspects include large turnover taxes (levied primarily on consumer goods), rapidly growing subsidies on hous- ing and industrial purchases of agricultural goods, widely varying profit rates when computed as a return to capital, differential prices for the same good, and inflated prices of new products. Each of these prob- lems will be discussed briefly. Finding a Basis for Valuing Soviet GNP The important uses of national income statistics in- clude the analysis of resource allocation and the measurement of the growth of economic production capability. A considerable amount of Western litera- ture centers on measurement of national income for these purposes and on what can or cannot be implied from the results.“ In practice, Western countries construct GNP accounts using existing market prices as if they met the theoretical requirements for use in measuring resource allocation or economic growth. Although the requirements are never perfectly met, market prices of most Western industrialized coun- tries fit the theoretical model reasonably well, so that the distortions probably are small. The Soviet Union’s centrally established and fre- quently arbitrary prices diverge greatly from the theoretical model. The principal requirements of this model are that the relative prices of two goods should be equal to their relative marginal costs and that the rate of return to each factor of production should be equal in all of its uses. Soviet procedures for price formation violate these requirements. A price based on the average direct cost of all enterprises producing a product does not allow for the differential cost of the capital resources being used, for the different utility “ Among the classic articles are: J. R. Hicks, “The Valuation of Social Income," Economica 7, May 1940, pp. 105-124; Simon Kuznets, “On the Valuation of Social Income,” Economica 15, February-May 1948, pp. 1-16, 116-131; J. R. Hicks, “On the Valuation of Social Income,” Economica 15, August 1948, pp. 163- 172; P. A. Samuelson, “Evaluation of Real National Income," Oxford Economic Papers 2, January 1950, pp. 1-29; and Richard H. Moorsteen, “On Measuring Productive Potential and Relative Efficiency,” Quarterly Journal of Economics 75, February 1961, pp. 451-467. 34 Approved for Release: 2019/07/19 C05210421
Not linked to a story yet.
FOIA release, from the cia-readingroom collection. The PDF is mirrored here; the original link is under it. 399 pages are in the text index: search them above, or from the library's search.