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essential, and so are some knowledge of plan fulfillments. This was one
of the reasons why, in my book, I have presented as much detail as I could.

The whole discussion in Soviet-type economies concerning economic
incentives, reform of the price system, reforms of planning, indicates that
planners are not satisfied that what happens corresponds to their wishes.
There are other indications: in the East German Statistical Yearbook there
virtually no data on credits given to enterprises which would give a more
significant clue to the workings of the economy than the plan fulfillment
of selected physical outputs such as steel or coal. Currency reforms
that have wiped out excess money; the appearance and disappearance of
installment buying, the emergence of discount houses in Russia to sell
unwanted goods are clues to how the rates of growth should be interpreted.

It is no answer to say: but the goods are being produced, and
more and more of them, and physical capacity is increasing. Everyone
working in West African economies knows that the increase in cocoa
production is "good" only if someone wants it, and the "someone" is
normally outside of West Africa since the Nigerians or Ghanaians don't
like chocolate. What would anyone say if Nigeria tried to solve its
development problem by promoting cocoa production--which with the existing
knowledge is quite easy to do--cutting itself off from the rest of the
world, forcing its people to consume chocolate; achieving a growth rate
of 10%-15% per year on this basis; and defending it on the grounds that it
reflects the planners' preferences and that cocoa is after all produced in
rapidly increasing amounts!

Growth rates of Soviet-type economies are impressive--though less
so than some "Western" growth rates such as Japan's. But in interpreting
them and in comparing them with Western growth rates this aspect that the

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increase in individual physical outputs cannot be interpreted as in a
Western type economy must not be forgotten. It may account in part for the
fact that some of the Soviet-type economies grow so rapidly while
getting so slowly to where they want to go. It certainly means that when
comparing Soviet-type and Western economies, growth rates are only one
and not necessarily the best measure of assessing relative performance.
In any case, the details of the aggregation called national income or
gross national product, are more important than the final results.

Cambridge, Massachusetts

November 14, 1962

Wolfgang F. Stolper