The sensitivity of Soviet real national income measurements to “index number relativity” requires that we devote more attention to methodology than is usual in a study of historical national income. Index number relativity, or the “Gerschenkron effect”, denotes the statistical phenomenon whereby more rapid national income growth rates are obtained when early year valuation weights are used. This effect is explained by the inverse correlation between the growth rates of outputs and relative prices normally observed as an economy experiences economic development. Typically, remote historical series are constructed from crude data using prices and other value weights that, at best, approximate the underlying theoretical standard. They are, with few exceptions, calculated in “late year” prices; that is, in prices prevailing after the industrial transformation of the country has taken place. Alternate “early year” series cannot be compiled because of the lack of data, and even when alternate series are calculated, the statistical raw material is so insensitive that anticipated results may not obtain.

Moreover, there is evidence that index number relativity has a less significant impact on the national income measures of the industrialized capitalist countries, at least during the time span that can be conceivably reconstructed from the historical record. Such countries simply have not had the cataclysmic structural transformations experienced in the Soviet Union during the early five-year plans. Thus national income measures spanning even a long time period will not be as seriously confounded by index number problems as in the Soviet case.