Why Were American Econ Textbooks So Pro-Soviet? By Bryan Caplan

When I was in Econ 1, we actually used the infamous 1989 Samuelson text – the one that said, “the Soviet economy is proof that, contrary to what many skeptics had

earlier believed, a socialist command economy can function and even

thrive.” So I was delighted when my colleague David Levy and his co-author Sandra Peart decided to put Samuelson’s Sovietology under a microscope.

Back in 2006, they published some preliminary findings; now we can see Levy-Peart’s full story. Quick version: Samuelson habitually overestimated Soviet growth, edition after edition. Here’s a nice table summarizing the numbers relayed to millions of students over the decades:

Levy-Peart find that Samuelson was hardly alone. Successive editions of competing textbooks were also stubbornly high on the USSR:

What we

find repeatedly is over-confidence in the potential for Soviet growth and an

asymmetric response to past forecast errors. More than this, the textbooks

report faster Soviet income growth combined with a constant ratio of Soviet-US

income. This trust in the future and skepticism about the past was the basis of

a standard Soviet-era joke: “Under Communism, the Poles are fond of saying,

only the future is certain; the past is always changing.”

When Levy first presented this evidence, he gave it an anti-elitist spin. The problem, he said, was that we put too much trust in experts, and not enough in Soviet anecdotes. I demurred. The real problem, I said, was left-wing bias. Samuelson and other mainstream Keynesians were socialists at heart, so they bent over backwards to be “fair” to their ugly cousins behind the Iron Curtain.

In the latest draft, Levy-Peart try to distinguish between these competing hypotheses, and wind up standing by their original position. They create a 2×2 textbook matrix. Ideology (liberal vs. “neutral”) is on one axis; methodology (“thick model” vs. “thin model”) is on the other.

If I understand Levy-Peart correctly here (and I’m not sure I do), they link trust in experts to the thin model, and egalitarian respect for the man in the street to the thick model. In any case, they conclude that:

If the

overstatement of Soviet growth was mainly driven by ideology we would expect

Samuelson, Tarshis and Heilbroner to overstate Soviet growth more dramatically

than McConnell and Bach. They did not. If the problem arose primarily because

of the use of thin models, Samuelson and McConnell would overstate Soviet

growth more dramatically that the other texts. This is what we have observed

above.

They may have a case, but I’d like to see Levy-Peart expand their universe to include full-blown right-wingers. If you sampled all economists writing about the Soviet economy in, say, 1970, what would be the stronger predictor of negative assessments – ideology or elitism? I bet that in a decent multiple regression, ideology would crush elitism. Alas, I don’t know enough about the data even to specify a decent bet, but I’m more than open to one.

P.S. If you want to find one thinker who analyzed the Soviet economy using Production Possibility Frontier diagrams without becoming a Soviet dupe, see the article on “Communism” in The Concise Encyclopedia of Economics. 🙂