Finance

What there is to learn from the Soviet economic model

IN 1955 Jawaharlal Nehru, the prime minister of India, embarked on a 16-day tour of the Soviet Union. He was like a “kid in a candy store”, according to one editor of his letters. Besides the Bolshoi ballet and the embalmed corpse of Stalin, he visited a Stalingrad tractor works, a machinery-maker in Yekaterinburg and an iron-and-steel plant in Magnitogorsk. In a letter, he wondered if the Soviet Union’s economic approach, “shorn of violence and coercion”, could help the world achieve peace and prosperity.

The answer, of course, was “no”. But Nehru concluded otherwise, incorporating Soviet ideas into India’s five-year plans and welcoming Soviet aid, equipment and expertise. In the year of his visit, the Russians set up a steel factory in what is now the Indian state of Chhattisgarh. It became India’s main supplier of rails.

Nehru was not alone. The Soviet model impressed many leaders in the poorer parts of the world. Even today, according to Charles Robertson of…