This has to be one of the more head-beating pieces of economic research that has been done recently. Mssrs. Novokmet, Piketty and Zucman have attempted to measure the development of inequality from Tsarist times into the New Russia, with the Soviet period sandwiched in between. They also tell us that inequality was high under the Tsars--not a huge surprise in what was still essentially a feudal economy with small bits of industrial capitalism appearing here and there. Similarly, we're not surprised with a resource rich and not entirely open and free economy like that of the present Russia having high inequality. It's the bit about Soviet Russia in between which is somewhere between nonsense and why one Earth did they bother?
I would argue more than a little bit with their estimations of the basic Soviet standard of living myself:
According to the estimates reported on Figure 1a, per adult national income has
increased by about 40% between 1989 and 2016, from slightly more than 16 000€ at
the end of the Soviet period to almost 24 000€ in recent years (both expressed in
2016 euros using purchasing power parity exchange rates).
No, really, no, I just don't think so. That's to put Soviet Russian living standards in 1990 roughly on a par with Czech Republic ones today. And that just ain't true, sorry. I currently spend half my time in that Czech Republic and not in the richest part of it either, but in one of the depopulating industrial towns in Bohemia. And in 1990 I was living in Moscow, by far the richest part of Soviet Russia. The two living standards aren't even close.
But this calculation here seems to think they are. Per adult national income in 2018 euros is, roughly enough, GNI divided by number of adults. That for the Czech Republic today is about 18,000 euros (GDP per capita at PPP is $18,000 or so, 15% children, the $ to € is about 1.15 to 1, roughly that's about right at 18 k €). Czechs were richer than Russians in 1990, by a long way, Czechs today are twice as rich (roughly) as they were in 1990. Yes, my number is very rough here, but no, that estimation of the Soviet standard of living is simply wrong, even trying to use PPP. They've even got Soviet Russia as being richer then than Poland now which just isn't going to fly.
But there's a much bigger problem, which they allude to and then ignore:
The same general remark applies to the Soviet period. Monetary inequality was
5% means that top 1% income holders earn only 4-5 times the average income of the
reduced to very low levels under Soviet communism (and also in other communist
experiences, as we shall later see). For instance, a top 1% income share around 4-
time, as compared to 20 times when the top 1% share is equal to 20%. This
reluctance to rely on extended monetary hierarchies is a feature that is confirmed by
all Soviet household surveys and administrative documents on salary scales. In
addition, the Soviet regime abolished private ownership (except in some cases for
small capital holdings) and therefore suppressed top capital incomes (which in other
societies always represent a large fraction of top incomes). It also compressed very
significantly the hierarchy of salaries and labor incomes.However this obviously does not mean that the Soviet elite did not have access to
superior goods, services and opportunities.30 This could take different forms – access
to special shops, vacation facilities, etc. – which in effect could allow the Soviet top
1% to enjoy living standards that in some cases might have been substantially higher
than 4-5 times average incomes (though probably quite a bit lower than under Tsarist
or in post-Soviet Russia). Unfortunately we have no way to quantify this.
This is something which various economists keep pointing to, it's not monetary inequality which is is of any great interest, to whatever extent that inequality is of interest. What matters is consumption inequality and in Soviet society what you could consume simply was not determined by your monetary income. It depended upon your blat, your "pull," that in turn being a function either of your position in the Communist Party hierarchy or the criminal one--to the extent that the two differed.
Attempting to measure inequality in a society by monetary income where monetary income simply was not the determinant of inequality, as in Soviet Russia, just isn't going to work, is it?
