The Cost of World War II to the Soviet People: Two Five-Year Plans?

In a recent paper in this Journal, James Millar and Susan Linz seek “to determine the reasonableness of the Soviet claim that World War II cost the Soviet economy two Five-Year Plans.†They argue that Soviet direct estimates of non-human war cost (capital loss plus direct war outlays plus wartime loss of national income), made by a postwar Extraordinary Commission, imply a cost per employed member of the 1940 population of 7.4 years' earnings. Their own indirect approximation of war cost—based on a construct which incorporates estimates of prewar and wartime propensities to consume and invest, a 30 percent capital loss claimed by the Soviets, and an assumed capital-output ratio of 3—is 3.9 years' earnings. After hypothesizing various values for their parameters, they conclude that “[t]he popular Soviet claim that World War II cost ‘two Five-Year Plans’ is, therefore, above the upper limit [6.0 years' earnings] of the range of the total war cost estimates calculated using Soviet national income data.†2 The implication is that their results cast significant doubt on “the reasonableness†of Soviet claims of war cost. This paper will demonstrate that if the Soviet direct estimate of war cost is properly expressed in Sovietmeasured 1940 consumption years, Millar-Linz's perceived divergence between the Soviet direct and their indirect estimate of war cost disappears.