Here we examine the comparative GDP per capita growth rates in market and centrally-planned

economies from 1950 to 1975, when the extensive growth model was perceived to be exhausted. For
a better comparison, I’ve excluded the Western powers (except in the USA vs USSR comparison) to
focus on analysing growth rates in economies which are at a similar stage of development. All figures
are sourced from the original Maddison Project dataset, and are given in 1990 International Geary-
Khamis dollars.

South European market economies

Italy Greece Portugal Spain Growth Index (1950 level = 1)

1950 3,172 1,915 2,086 2,189 1 for all
1955 4,190 2,514 2,475 2,778 1.32, 1.31, 1.19, 1.27
1960 5,456 3,146 2,956 3,072 1.72, 1.64, 1.42, 1.4
1965 6,964 4,509 3,992 4,762 2.2, 2.35, 1.91, 2.18
1970 9,367 6,211 5,473 6,319 2.95, 3.24, 2.62, 2.89
1975 10,619 7,722 6,517 8,346 3.35, 4.03, 3.12, 3.81

Independent-minded communist countries

Hungary SFR Yugoslavia Albania Romania Growth Index (1950 level = 1)

1950 2,480 1,428 1,001 1,182 1 for all
1955 3,070 1,707 1,181 1,578 1.24, 1.2, 1.18, 1.34
1960 3,649 2,370 1,451 1,844 1.47, 1.66, 1.45, 1.56
1965 4,410 3,125 1,675 2,386 1.78, 2.19, 1.67, 2.02
1970 5,028 3,945 2,004 2,853 2.03, 2.76, 2, 2.41
1975 5,805 5,004 2,289 3,761 2.34, 3.5, 2.27, 3.18

Blue countries undertook more market-oriented reforms, whilst brick ones maintained hard-line
Stalinist command structures. Note that both Hungary and Yugoslavia had Stalinist structures before
transiting, hence the earlier years are appropriately color-coded as such. Though the market-oriented
communist countries performed better on average, Romania’s early successes despite Stalinist central
planning were indeed laudable.

Soviet-style economies

Bulgaria Czechoslovakia Poland Growth Index (1950 level = 1)

1950 1,651 3,501 2,447 1 for all
1955 2,148 3,922 2,794 1.3, 1.12, 1.14
1960 2,912 5,108 3,215 1.76, 1.46, 1.31
1965 3,850 5,533 3,787 2.33, 1.58, 1.55
1970 4,773 6,466 4,428 2.89, 1.85, 1.81
1975 5,831 7,399 5,808 3.53, 2.11, 2.37

Here we observe that Bulgaria had exceptionally high growth rates despite the command structure of
its economy. This was plausibly because it had the closest ties with the USSR amongst the whole
Eastern Bloc, allowing for a more effective division of labour and steady supplies of raw materials. In
stark contrast, Czechoslovakia’s growth was particularly sluggish. Perhaps the extensive growth
approach from central planning could not work as well in already industrialized countries.
Battle of the Superpowers

United Soviet Growth Index 𝑆𝑜𝑣𝑖𝑒𝑡

𝐴𝑚𝑒𝑟𝑖𝑐𝑎𝑛
GDP per capita ratio
States Union (1950 Index = 1)
1950 9,561 2,841 1 for all 0.297
1955 10,897 3,313 1.14, 1.17 0.304
1960 11,328 3,945 1.18, 1.39 0.348
1965 13,419 4,634 1.4, 1.63 0.345
1970 15,030 5,575 1.57, 1.96 0.371
1975 16,284 6,135 1.7, 2.16 0.377

For all its notorious inefficiencies, the USSR was in fact catching up to the USA! No wonder that
Khrushchev was so confident in “burying” the Americans – with double the GDP per capita growth
rate up till the 1960s, it was quite conceivable to foresee overtaking towards the end of the century.
Even renowned Western economics like Paul Samuelson subscribed to the view. Unfortunately for the
Soviets, the growth soon tapered off under Brezhnev’s rule, giving way to the Era of Stagnation.

Concluding Remarks

It’s worth noting that GDP per capita figures alone do not give us a holistic picture of living standards
within a country. Numbers alone do not show the militarized nature of the Soviet economy, or how
Spain and Portugal exploited their colonies (up till the late 1960s and early 1970s respectively) to
obtain cheap raw materials and fuel industrial growth. Social indicators are also hidden – despite being
less prosperous, citizens of communist countries enjoyed widespread literacy and a comprehensive
welfare state, as opposed to Spain and Portugal which were vastly unequal and tried to
institutionalized inequality (for instance, by limiting educational access to women).

I’ll leave the readers to draw their own conclusion as to what these figures mean. For me, it helps
explain why the communists were tolerated or even popular at the beginning. The lag behind the
capitalist world did not surface until the mid-1960s – even then, it was not obvious until a decade
later, when extensive growth outlived its shelf-life.