It seems to me that Western economists didn’t do very well in understanding the Soviet economy, or that of other East Bloc countries. According to Paul Krugman, “typical estimates of the GDP of East Germany before the old regime collapsed put its real GDP per capita at 70 or 80 percent of the West German level – meaning that East Germany was actually richer than some regions in the West. Yet after the fall of the Berlin Wall, visiting Westerners found something that looked like a Third World economy, with antiquated factories (and disastrous environmental problems) producing consumer goods of ludicrously low quality (like the notorious East German Trabant, an automobile that makes a Honda or Ford seem like a Mercedes). We used to think that the Soviet Union had an economy about half as large as America’s, that is, bigger than Japan’s; nowadays Russia seems to have less economic power than, say, Italy. ”
I know someone who, as late as 1985, came away from postgraduate work at Cornell convinced that East Germany was more productive and prosperous than West Germany. Someone in Army Intelligence!
By “we”, Kreugman is talking about academic economists in the US and western world generally. Paul Samuelson said, in his standard textbook, ““the Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive.” But it wasn’t just him.
While we’re at it, I’m not sure that that people like Hayek or von Mises or Friedman ever had much coherent to say about the performance of the Soviet economy in 1942.
But I am an observer, an outsider. I would welcome thoughts from readers who are professional economists, have talked with them and hung out with them, gotten stinking drunk with them and woken up naked under a shower in the girls’ dorm, etc.