See here. The Russian Revolution was not one of the greatest events in world history, nor was the planned economy necessary to develop the country, nor was it superior to capitalism.
Scott: One of the interesting ideas of this project (and also Allen’s work) is to explore different counterfactuals. What if, for example, the Bolsheviks had not seized power and the Tsarist regime had somehow managed to reform? What would have happened to the Russian economy?
Sergei: This is indeed a major advantage of our approach: our methodology allows us to carry out counterfactual analysis in a credible way. What would have happened to the Russian economy if it had Japanese policies and market frictions? How would Mao’s industrialization have proceeded if he had followed Stalin’s policies? We have answered these and some other questions in our papers on Soviet and Chinese industrialization. As to your particular question, in the first of these papers we find that if there had been no entry barriers or monopoly power in the non-agricultural sector, then, by 1940, GDP per capita in the Tsarist economy would have been about 50 percent higher than in the actual Soviet data.
Scott: Circling around some of the same issues, the working-paper version of this article asked (echoing Alec Nové), “Was Stalin Necessary for Russia’s Economic Development?” Was he?
Sergei: The answer is certainly “no.” Even without accounting for the huge human and social costs of Stalin’s policies, we find that Stalin’s economic performance only slightly outperformed the inefficient Tsarist trend. Both significantly lagged behind Japan’s performance. Japan is the most natural contemporaneous comparator for Russia and the Soviet Union—as mentioned by Millar (1970), who discussed Alec Nové’s thesis. Indeed, over the period from 1885 to 1913, the Russian Empire and Japan had similar levels and dynamics of GDP per capita. Before World War I, Japan also had substantial distortions and barriers to allocation; we show that these distortions were similar to those of Tsarist Russia. However, in the interwar period, Japan managed to reduce those distortions and to accelerate industrial productivity growth. Our quantitative analysis suggests that a Russia with Japan’s policies would have substantially outperformed the actual dynamics of Soviet GDP.