Economic Collapse of Soviet Union
Dumas analysis Page 3


Theoretical unpreparedness
Page 2

Dumas analysis
Page 3

Breakdown of technology
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Breakdown of science
Page 5

Resource diversion
Page 6

Unproductive activity
Page 7

Militarization and bureaucracy
Page 8

Why did the USSR fall first?
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Did the USSR have any choice?
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Page 11

I suggest that we begin from the theoretical concepts developed by Lloyd Dumas in his 1986 book, The Overburdened Economy. (4)

To put the argument briefly, Dumas considers military production to be worse than unproductive activity -instead it is counter-productive (he uses the term "distractive"). He suggests that to evaluate an economy we should remove military production and unproductive activity from the Gross National Product (GNP). Instead, the overall economic calculation of a nation's economic performance should include only useful activity, that is, economic activity which produces goods and services that are directly useful to the standard of living, or that are used to produce such goods and services. He calls this measure the Social Material Product (SMP).

Once we reformulate our overall economic measure, we can classify labor in terms of its contribution to the SMP. There is productive labor (Dumas calls it "contributive") which adds to the SMP .There is unproductive labor (Dumas calls it "neutral") which neither contributes nor distracts (bureaucratic work, financial speculation, etc.). and, finally, there is counter-productive labor which Dumas calls "distractive," which takes technology and capital investment that is needed for useful production and diverts it to non-useful purposes, in particular, military production.

Although the Dumas thesis is new, we can see its roots in Marxist and pre-Marxist economics. Dumas acknowledges that he has expanded on a distinction made by Adam Smith between productive and unproductive labor. We find the same distinction by Marx in Capital where he separates the productive labor of agricultural, textile, mining, industrial, and household workers from the unproductive labor of the. ..

ideological classes, such as government officials, priests, lawyers, soldiers, etc., further, all who have no occupation but to consume the labor of others in the form of rent, interests, etc; and lastly, paupers, vagabonds and criminals.(5)

The theoretical work of Dumas comes out of very practical experience. He was a student of Seymour Melman, who for decades has worked with trade unions, especially the International Association of Machinists (IAM), and elected officials, including George McGovern, Ted Weiss and Jim Wright, to formulate economic conversion planning and legislation. Melman has argued for decades that military production is responsible for the decline in U.S. infrastructure and industrial plant, with special emphasis on the machine tool industry.

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