The Gosplan mathematical economist who first formalized the capital-goods-led growth model
At the height of the 1929 industrialization debate, Feldman declared that growth "cannot be limited by petty-bourgeois resistance — only by material possibilities, with all working people strained to the edge of physical and psychological endurance."
An electrical engineer by training, the Gosplan economist who in 1928 formulated the first formal growth model in the history of economics. His two-sector capital-goods/consumer-goods framework was adopted as the working hypothesis for the Soviet General Plan (1930–45), yet tendentious criticism forced him out of Gosplan in 1931. In the 1950s, American economist Evsey Domar rediscovered his work, and the Feldman–Mahalanobis model later became a theoretical foundation for India's development planning.
Career Timeline
- 1912–1922Electrical engineer in Petrograd and Moscow; participated in the GOELRO electrification plan through VSNKh's electrical department
- 1923–1927Joined Gosplan's world economy conjuncture department at Krzhizhanovsky's invitation; published analyses of foreign economic conditions
- 1928As head of Gosplan's long-term planning department, presented the two-sector growth model — the first formal growth model in economics
- 1929–1930Published 'Analytical Method for Constructing Long-Term Plans'; the Feldman model adopted as working hypothesis for the General Plan (1930–45)
- 1931–1934Forced out of Gosplan amid tendentious accusations; headed the technical constructions department at the Planning Academy
- 1935–1937Chief of the consolidated plan group at Glavsevmorput (Northern Sea Route administration)
- 1937–1953Repressed, then worked in engineering posts across the USSR, obtaining patents for drilling technology
- 1953–1958Returned to Moscow seriously ill, ceased economic work; posthumously rehabilitated
Related historical events
- 1921–1928The New Economic Policy (NEP)published a two-sector growth model in Gosplan at the end of NEP, influencing the debate on transition to planned economy
- 1928–1937The Five-Year Plans and the Soviet TransformationGeneral Plan model designerAs head of Gosplan's long-term planning department in 1928, he formalized the two-sector (capital goods / consumer goods) growth model, which was adopted as the working hypothesis for the Soviet General Plan (1930–45) and became the theoretical foundation for Five-Year Plan construction.
The Feldman Growth Model: Structure, Debate, and Global Afterlife
In two articles titled 'On the Theory of the Rates of Growth of National Income,' published in the journal Planned Economy in November and December 1928, Feldman formalized the first macroeconomic growth model in the history of economics. Recasting Marx's reproduction schemes into a two-sector framework, he divided the entire economy into a capital-goods sector (K) and a consumer-goods sector (C), each with its own capital coefficient. The model's key variable was λₖ (the share of total investment allocated to the capital-goods sector) and its central finding was that a higher λₖ suppresses short-run consumption growth but yields a higher long-run growth rate and ultimately a higher level of consumption.
The model was adopted as the working hypothesis for the Soviet General Plan (1930–45), and Feldman's minimum-growth scenario proved remarkably close to the actual growth rate of Soviet national income through 1940 and even 1950. Yet during the 1930–31 planning debates his projections were attacked as excessively optimistic, and tendentious denunciations in party organs like Za Industrializatsiyu forced him out of Gosplan.
In the 1950s, Evsey Domar, co-author of the Harrod–Domar model, surveyed Soviet planning literature from the 1920s and discovered Feldman's articles. Domar concluded that 'Soviet growth models are more developed than similar attempts made in the West, with the exception of Leontief's work.' Introduced to the West through Domar's 1957 Essays in the Theory of Economic Growth, Feldman's model was later combined with a similar framework developed independently in 1953 by Indian statistician Prasanta Chandra Mahalanobis. The resulting Feldman–Mahalanobis model became the theoretical foundation for India's Second Five-Year Plan (1956–61), and a product of 1920s Soviet planning debates was thus resurrected as a core instrument of Cold War-era Third World development economics.