20. The widely differing standards of living in the two countries are reflected throughout in the much smaller allocation of current resources in the U.S.S.R. to the needs of the consumer. (The Foreign Office have calculated Soviet con- sumption per head as only 35 per cent. of the United Kingdom's.) Although the amount so allocated may be appropriate to the maintenance of a standard to which Russian people are accustomed, it allows a much larger allocation to capital re-equipment.
U.S.S.R.
21. To take a single example, the output of motor vehicles in the two countries in 1948 compared as follows (figures in brackets being the 1950 plan):
United Kingdom (In thousand units) (65.6)
Cars
Lorries and buses Tractors
8.4 209·8 (434·4)
55·5 (112.0)
334.8
173.2
117-3
Thus, although the total output of vehicles in the U.S.S.R. was less than half that of the United Kingdom, the U.S.S.R. was able, by neglecting almost entirely the passenger-car demand, to produce rather more load-carrying vehicles than the United Kingdom.
The Foreign Trade Requirement
22. The United Kingdom is obliged to export a substantial proportion of the products of her manufacturing industries in order to import consumer necessities, particularly food. In some industries, notably the engineering indus- tries, this proportion is very high (e.g., locomotives about one-third, passenger cars over two-thirds, commercial motor vehicles one-half, metal working machine tools one-third). The U.S.S.R. is under no such compulsion. Her foreign trade is a fraction of our own and, such as it is, its pattern is the reverse, i.e., primarily an export of food-stuffs and timber against an import of capital equipment.
The Future
23.
The future military capabilities of the U.S.S.R. must be judged against economic capabilities very different from what they are to-day, as the following figures of output in 1948 compared with the plans for 1950 and 1960 show :-
Coal (million tons)
Steel (million tons)
Power (million kWh.)
Oil (million tons)
Motor vehicles (thousand units)
1948
1950
1960*
210
250
500
17.7
25
60
63.8
82
290
28.6
35.4
60
218
500
1,000
24. The "1960" figures may be regarded more as aspirations than targets, but if anything like them is, in fact, achieved, the U.S.S.R.'s resources in, for example, steel, will be twice the greatest production of steel ever available to the Germans during the last war at the limit of their territorial expansion, and more than four times what was available to the U.S.S.R. herself in 1944 from her own production and from Lease-Lend.
Requirements in War
25. The task of the Soviet economy in peace in relation to its armed forces is to maintain and gradually to re-equip them. Allowing for the necessary amount of obsolescence, wastage is infinitesimal compared to war conditions: damaged or obsolete material can be recovered; production of ammunition, which in war makes heavy demands on steel, can be kept at a low level; and almost the whole of new production is a net addition to the reserves of equipment.
26. In war not only have the forces to be expanded rapidly, but they have to be supplied at a rate sufficient to meet operational wastage. The adequacy of the Soviet, or any other, economy in war therefore depends on the scale, duration
* These wagen! 4hpfo the figure for motor vehicles, whages 14 telfigo estimate) are the figures set by Stalin in 1946 as those which should be attainable after three Five-Year Plans if not more.
14
aRagatdak7ty foßhe war, about which it is only pose to Kumptions. Wastage rates, however, are almost infinitely variable. Germany's greatest military successes were gained at little cost in industrial effort; and her forces were shortest of equipment when her armaments production was at about its peak.
27. The most that can safely be said about the U.S.S.R. is that her economy to-day could certainly sustain a war, even a major war, of short duration. There is some doubt whether it could yet successfully sustain a prolonged major war involving a consistently high rate of wastage. There seems little doubt that it should be in a position to do so within eight to ten years' time. These assessments can, of course, take no account of the possible effects of Allied action against her economy.
Conclusions
28. Although there is no satisfactory method by which a country's war potential can be precisely calculated from its economic capabilities, the above comparisons strongly suggest that—
(a) the U.S.S.R.'s present defensive effort as estimated is not beyond her economic resources and does not represent a markedly greater burden upon her economy than does our own;
(b) whether the present economic resources of the U.S.S.R. would be adequate for war depends upon the scale, nature and duration of the war and specifically upon the rate of wastage it imposed;
(c) the U.S.S.R.'s economic resources are adequate for a war, even a major war, of short duration; they might well not be adequate before 1957 for a prolonged major war involving a consistently high rate of wastage.
Ministry of Defence,
26th May, 1949.
APPENDIX TO ANNEX B
WORLD WAR II
Output in Units
Output
U.S.S.R.
United States
United Kingdom
Germany
1943
1944
1943
1944
Aircraft
37,000 40,000
85,930 96,359
1943
26,263 24,461
1944
1943
1944
25,527
39,807
Tanks and
S.P. guns
Artillery
22,000 29,000 38,656
107,000 117,000 64,539 34,178
20,499
16,802 n.a.
7,443 4,533 12,063 19,002
42,159
n.a.
Steel output
(million tons) 7.9
10.2
79.3
80.0
13.0
12.1
20.8
18.3