Friedrich August von Hayek · Year unverified
Hayek’s review of Abram Bergson’s study presents it as an unusually substantial empirical contribution to understanding the Soviet economy. Its central interest is the tension between egalitarian objectives and the persistent importance of earnings differentials and monetary incentives. Hayek begins by distinguishing the limitations of available evidence from the quality of Bergson’s scholarship:
He has spared no effort and has thoroughly searched the Russian literature and analysed and presented the results in a manner both clear and precise.
The review moves from method to findings, then to international comparison and supplementary evidence. Bergson measures wage inequality through quartile ratios, both within particular industries and across industry as a whole. Hayek accepts this as an intelligible measure while noting that it captures only one aspect of the earnings distribution. His praise therefore rests on careful use of incomplete evidence, not on a claim that Soviet wages have been comprehensively documented.
The principal substantive finding concerns the growing reliance on financial rewards:
The careful discussion of the significance of money rewards in the Soviet economy shows the great and increasing extent to which policy has been driven to rely on the money incentive and how even most of the much advertised non-pecuniary incentives, such as the various orders and "Hero" titles, are regularly accompanied by substantial financial benefits.
Hayek stresses the material benefits attached even to ostensibly nonmonetary honours. He also preserves the historical qualification: the first decade of Soviet rule brought a deliberate, partly successful reduction of earnings inequality, subsequently largely reversed, although the distribution in 1934—the latest year with detailed evidence—remained more equalitarian than in 1914.
The review identifies the comparison between Soviet industrial wages in 1928 and American industrial wages in 1904 as the book’s most interesting section. Even at the Soviet high point of equalitarianism among the documented years, Bergson finds broadly similar earnings inequality in the two cases. Hayek highlights Bergson’s conclusion that Soviet wages followed capitalist principles. The comparison makes the observed distribution of rewards, rather than the regime’s declared commitments, the decisive evidence; its force nevertheless remains tied to the particular years and workers studied.
Hayek closes by noting evidence on rationing, housing, education, taxation, and the relation between wage earners’ and salaried employees’ incomes. He also singles out administrators’ concern to economise money costs in employing labour and the large pre-1914 share of installed power capacity still recorded in 1928. These observations broaden the review’s relevance from wage inequality to the incentives and inherited resources shaping Soviet production. His final judgment returns to the book’s empirical achievement:
It is a long time since so much solid information on any aspect of the Soviet economy has last become available between the covers of one book.
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