Soviet Union Economy

12 Key excerpts on "Soviet Union Economy"

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  The Paradox of Catching Up

  Rethinking State-Led Economic Development

  • L. Tan(Author)
  • 2005(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  A Revisit to the Soviet System 39 growth, which in turn has to involve the study of the institutions of the Soviet non-market system. Behind the rapid input expansion The key to understanding the inability of the Soviet economy to move on to intensive growth lies in the fact that the extensive growth in the Soviet economy, different from that of the market economies, was organized entirely through ‘non-market’ schemes. Let’s first take a look at how the Soviet non-market system generated fast input growth and why it was particularly effective at doing so. Note that the main interest here is the institutional aspect of the input mobilization process under the central planning, that is, the way in which input growth was generated in the Soviet, rather than the rate of Soviet input growth relative to that of the market economies. The Soviet economy is called a command economy, as it operated entirely through administrative orders and completely bypassed the markets. For simplicity and skipping the distinction between state and collective ownership that is not essential for the analytical purpose here, in the Soviet economy the state owns almost all natural resources and production means including land, forests, mineral deposits, buildings, machinery and equipment as well as almost all enterprises, stores, hospitals, schools and so on. The central planning authority coordinated all economic activities by issuing detailed directives through chains of command along the echelons of a single gigantic administrative hierarchy. In other words, the government directly answers the basic question of what, how and for whom to produce for the economy by making and implementing its central plans. Note that all prices in the Soviet economy were set administratively by the govern- ment. The planned prices no longer performed the fundamental func- tion of allocating resources and bore little information on the scarcity of goods, services and resources.

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  Finding a Path for China's Rise

  The Socialist State and the World Economy, 1970-1978

  • Philippe Lionnet(Author)
  • 2023(Publication Date)
  • transcript Verlag

    (Publisher)

  How to organise a socialist economy? The Soviet prototype The principal archetype and most influential example for the perception of and discourse on what defines a socialist economy is undoubtedly the Soviet Union. Although its po- litical economy was and still is widely perceived as a sort of blueprint for socialist eco- nomic policy in numerous countries falling within this category, there has always been a remarkable degree of variety among those economies. 13 Economic policy during Soviet “War Communism” was quite different from the Hungarian so-called “Goulash Commu- nism” or what we find in late Yugoslavia under Josip Broz Tito. 14 While the Eastern Euro- pean states and China – for various historical reasons and not entirely voluntarily – took experiences stemming from the consolidation of the Soviet revolutionary state at differ- ent stages as starting points for their domestic economic policy bundles, differences of a social, cultural, historical and even religious nature as well as with regard to economic and other preconditions led to divergencies that were accentuated over the years. Likewise, for the genesis of the Chinese socialist economy, the Soviet experience and the lessons drawn from it are crucial. Many basic tenets were directly adopted after and during the implementation of the first five-year plan, which became the core of economic policy at least for the central government in Beijing after 1953. Similar to other states, in which political power was in the hands of the people adhering to socialist ideas on economic organisation, the CCP came to choose the Soviet-style planned economy – with its emphasis on the development of heavy industry.The approach aimed at advancing the economic basis of a largely agrarian society at a sufficiently fast pace in order to ensure the legitimacy of the policies and thus the political rule of the party.

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  Accidental Occidental

  Economics and Culture of Transition in Mitteleuropa, the Baltic and the Balkan Area

  • Lajos Bokros(Author)
  • 2013(Publication Date)
  • Central European University Press

    (Publisher)

  All three were reprinted again in a new collection of essays entitled Individualism and Economic Order (The University of Chicago Press, 1948). Subsequent editions of this book constitute now the most common source of references, including that of footnote 19. 18 Accidental Occidental declared goals of Soviet communism. That is why the latter ultimately proved to be unable to achieve its own primary objectives . 21 This conclusion is less important now, after the fall of Soviet commu-nism. Had it been clear a hundred years ago, it would have been possible to avoid one of the most brutal, expensive, inhumane and futile attempts of building a utopian society. Trying to achieve unattainable goals and pursuing them ruthlessly against the will of hundreds of millions through-out a protracted period of time was one of the utmost tragedies of the twentieth century. 1.2. The historical evolution of Soviet communism In late 1917 the Bolshevik revolution was victorious in a geographically extremely vast, closed, poor, still very much underdeveloped and largely agrarian economy completely exhausted and pushed into economic chaos and societal disintegration by a historically unprecedented mecha-nized war. Under these circumstances, to pursue an economic strategy centered on promoting fast reconstruction and growth, especially that of heavy industrial output, was considered important for the new regime not only from the viewpoint of its ideology but it was imperative for sheer survival. In practice, Soviet communist economic and societal governance was born from the Prussian–Russian model of the war economy . That suited the revolutionary party of the Bolsheviks tremendously well.

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  Planning in the Soviet Union

  • Philippe J. Bernard(Author)
  • 2013(Publication Date)
  • Pergamon

    (Publisher)

  CHAPTER II CHARACTERISTICS OF THE SOVIET SYSTEM SINCE the political and juridical system of the Soviet Union differs widely from that of most other countries, it is important to recall first some of the general features of this system as they are at present; we shall pay particular attention to those aspects which have the greatest bearing on economic organization. The preamble to the principles of civil legislation of the USSR and the Union Republics adopted by the Supreme Soviet in December 1961^ defines the present Soviet economy in the follow-ing terms: During the period of the building of socialism, the economy is based on socialist ownership of the means of production in the shape of State (public) property and collective ownership of co-operative farms. The latter will gradually draw closer to State ownership until a unified form of communist public ownership of the means of production has been achieved. Personal property derives from social property, and is one of the means of satisfying the needs of citizens. With the advent of communism, citizens' personal needs will to an ever-increasing extent be satisfied from public resources. In the building of communism, full use is made of the concepts of money and marketing, in conformity with their new role in a planned socialist economy, and major instruments of economic development, such as accounting, money, prices, cost, profit, trade, credit and finance, are utihzed. The building of communism is founded on the principle of the material incentive of citizens, enterprises, collective farms, and other organizations. The Soviet State exercises planned control over the development of the national economy of the USSR, in accordance with the Leninist principle of democratic centralism.

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  The Economic Sources of Social Order Development in Post-Socialist Eastern Europe

  • Richard Connolly(Author)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  5 Economic structure, the international economy and the collapse of the Soviet Union  

  This chapter is the first of four case studies that aim to explore the link between economic structure, the international economy and social order development. It considers the influence of the natural resource sector on Soviet politics. Whereas subsequent chapters examine the link between economic structure and politics in countries in the period after the collapse of socialism, this chapter examines the role of economic structure in causing a limited-access order to collapse. Two main arguments are made. First, that developments in the wider international economy directly affected the decision-making of Soviet leaders. Second, it is argued that the economic structure of the Soviet Union constrained the choices available to the Soviet leadership when events in the international economy, and its own systemic inefficiencies, compelled it to undertake increasingly radical reform measures in the 1980s.

  This is done in three parts. The first section outlines the broad patterns of interaction between the Soviet economy and the international economy. After the 1960s, the Soviet Union developed much deeper links with the international economy (i.e. outside of the socialist bloc). The pattern of interaction was quite simple: the Soviet Union exported natural resource products and used the proceeds to pay for imported food and, increasingly, machinery that the domestic economy was unable to produce.

  The second section offers a stylized outline of the basic features of the Soviet system. Here it is suggested that the Soviet Union was a limited-access order in which the fusion of state and economy ensured that the Communist Party of the Soviet Union (CPSU) possessed unchallenged political power. However, the effects of a centrally planned economy reduced the efficiency of the Soviet economy and intensified the internal contradictions at the heart of the political system in which the CPSU possessed extreme formal powers that were increasingly undermined by informal practices. The deleterious effects of such a system were masked by the export of natural resources that increased revenues at precisely the same time that the domestic economy began to falter. In the context of rising resource revenues, the incentive to engage in systemic reform was considerably reduced.

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  Dollars and Change

  • H. Clark Johnson(Author)
  • 2001(Publication Date)
  • Yale University Press

    (Publisher)

  This spelled trouble, as the pools of untapped resources gradually dried up or could not be squeezed farther because of inefficient organizational structures. Figures on output growth in the Soviet-type economies need to be viewed cautiously, because output was heavily skewed toward producer goods like steel that contributed little to the welfare of the people, and the quality and assortment of consumer goods were low. Comparisons with more developed economies need also to be treated with care: growth, when the conditions for its occurrence are present, tends to be more rapid at lower than at higher levels of development. What the historical com-parisons reveal clearly, however, is that the initial introductions of the central planning system in Russia and China led to periods of industrial-ization at paces significantly faster than those countries had been experi-encing prior to the accession of the Communists to power. But growth eventually stalled in Russia, and it accelerated still more in China after that country's adoption of market-oriented economic reforms. OTHER ECONOMIC SYSTEMS So far, we have discussed only two sharply contrasting systems. The op-posing social philosophies supporting these systems dominated much debate of the past century, and the economic, political, and military con-test between the camps embracing them was a central part of that cen-tury's drama. But the two by no means cover the spectrum of actual economies. Indeed, the pure capitalist market economy is an abstraction not seen in practice, a model only imperfectly descriptive of any of several real-world economies. For their part, models of socialism also vary enor-mously, with some self-styled socialists even viewing that term as inappli-cable to the Soviet system. 11 The form of planned socialism that de-10. Gregory and Stuart, 1999, pp.

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  International Privatisation

  Strategies and Practices

  • Thomas Clarke(Author)
  • 2011(Publication Date)
  • De Gruyter

    (Publisher)

  Second, to say that the economy has become subjected to the ruling political power actually implies that the ruling power has the real ownership of the means of production, i. e. that the bourgeoisie still exists even if without legal ownership. Third, the category totalitarian state hides the essential differences between the Soviet system, in which the state is determinant, and the fascists and nazi states in which the market is determinant and in which the state, in spite of its totalitarian form, is still the ultimate agent of the interests of privately owned oligopolies. Finally, if all these objections hold, the notion of the Soviet Union being an economy producing use values loses its theoreti-cal grounds. There are many different views on the nature of the Soviet type systems and the debate on this point has been extremely rich and complex. One should distinguish at least between four categories: (a) in the Soviet Union socialism had been achieved; (b) in the Soviet system pro-duction was basically socialist, but distribution was capitalist; (c) in the Soviet Union capi-talism had been restored; and (d) the Soviet Union was a new type of exploitative society. This subdivision is very rough. Each of the four above mentioned categories can be considered as a theme on which many different variations are possible and many intepretations are not easily fitted into only one of these basic four categories. For me, the label (e.g. state capi-talism or new type of exploitative society) is not important, as long as one sets out clearly the specific, class, features of those countries. Privatization: East Meets West 295 Of course, it is possible that under classical capitalism (especially under oligop-oly capitalism) the state regulates production and distribution possibly through a plan. But, the plan is indicative and both the nature and the extent of regulation are determined by the market, i. e. by what is necessary for the market to keep functioning.

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  The Industrialisation of Soviet Russia Volume 7: The Soviet Economy and the Approach of War, 1937–1939

  • R. W. Davies, Mark Harrison, Oleg Khlevniuk, Stephen G. Wheatcroft(Authors)
  • 2018(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  It is reasonable to interpret the Soviet institutions built under Stalin in the 1930s as improvised to replace the market incentives to work, save, and innovate by substituting artificial incentives to do the same things. These institutions were those described in our previous volumes: the compulsion to work, the wage and salary structures that established managers’ and officials’ promotion pathways, the bonuses for meeting quotas, the payments to collective farms for food surpluses, the charges levied on farms for state machinery services, the penalties for shirking and disloyalty, the systems for forced resettlement and forced labour by detainees, and the spectrum of real, artificial, and illegal markets for goods and labour services, including the calculation of collective farm labour contributions and their reimbursement. In their time, these institutions worked, even if they did not work optimally or efficiently. That they worked is shown by their resilience: the Soviet economy did not collapse in the face of famines (in 1933 and 1947) or of deep invasion (in 1941 and 1942). It collapsed only when the central political institutions fell to pieces (after 1987).

  Despite this judgement, which some might interpret as favourable, it remains the case that the incentives provided by the Soviet economic system were always impaired and often perverse. The satisfaction of bureaucrats took precedence over the satisfaction of final consumers living in households and of intermediate consumers running businesses. High performance was rewarded at first, and then penalised by the burden of higher expectations. The value of rewards was uncertain; simulated effort was more likely to be rewarded than disruptive innovation.

  The UK and US economies would share many of these features in the coming World War, when government priorities replaced market prices and administrative success indicators replaced profits.15 The British and American war economies were distinguished from the Soviet economy, however, by the fact that their decision makers remained accountable to the rule of law and public opinion, with some limitations that, although important, were temporary, being limited to the war period. The absence of all such restraints in the Soviet economy permitted not only costly excesses of radicalism but also the mass incarceration and killing of people in very large numbers, including many who were only suspected of some potential disloyalty and many just to fill the quota. At work this was reflected in harsh penalisation of workers and managers, supposedly for mistakes or low effort, but there was a large random factor in the distribution of punishments, which encouraged everyone to shift their efforts from production to self-protection.16

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  The Age of Equality

  The Twentieth Century in Economic Perspective

  • Richard Pomfret(Author)
  • 2011(Publication Date)
  • Belknap Press

    (Publisher)

  Cuba subsequently became a frequent Soviet proxy in Third World countries. In most of these countries the advent of central planning was fol-lowed by improved economic performance. The new modernizing governments were successful in mobilizing resources and in meeting immediate goals of reconstruction or basic needs satisfaction. The gap between North and South Korea or between East and West Germany was less pronounced in the 1950s than it would become in the 1960s and after. China prospered in the early and mid-1950s, and economic conditions were much improved over the chaos of the 1930s and 1940s. The Soviet Economic Model 79 Cuba was successful in diversifying the economy between 1960 and 1964, and improving health and education services. Conclusions The Soviet economic model was the great economic experiment of the twentieth century. The Soviet planners aimed to improve on the functioning of the capitalist economy by mobilizing resources and controlling their allocation. The specific path selected by Stalin in the late 1920s involved rapid industrialization, based on collectivization of agriculture and squeezing rural living standards in order to achieve a rapid buildup of heavy industry (e.g., steel, hydroelectricity, machine building). For three decades the strategy was economically successful, reflected in military victory and satisfaction of basic needs of the population. In the 1950s communism was a plausible challenger to capitalism and with the launch of Sputnik and the first man in space seemed poised to even overtake American technological leadership. There had been a high price in terms of individual freedom, recog-nized in the Baltic countries, Ukraine, and other regions that had suf-fered most during the collectivization and industrialization drive after 1928. In Soviet propaganda, these costs were justified by victory in the Great Patriotic War, which suggested that the suffering had been worthwhile.

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  Social and Economic Change in the Pamirs (Gorno-Badakhshan, Tajikistan)

  Translated from German by Nicola Pacult and Sonia Guss with support of Tim Sharp

  • Frank Bliss(Author)
  • 2006(Publication Date)
  • Routledge

    (Publisher)

  7 ECONOMY AND SOCIETY IN THE SOVIET SYSTEM

  Public administration and Soviet development policy

  Despite frequent earlier references, it is appropriate to devote this chapter entirely to development during the Soviet period. In this way one can demonstrate how the extensive and far-reaching negative effects on cultural life and personal ownership of land and property were offset by the enormous improvements in state services, in particular the welfare system. In comparison with the neighbouring countries on, or near, the southern border – Afghanistan, Pakistan and almost certainly India too – the Pamiris did extremely well under the Soviet Union, especially from the mid-1950s onwards. This is why, in spite of having been subjected to often violent change under Stalin, and suffering continued denial of political rights under the Soviet system, most people are united in their criticism of the changes which took place after Tajikistan became independent. If you ask anyone about the advantages and disadvantages of the old and new systems, the honest reply is almost always: ‘We would like to have the Soviet Union back.’ Although people do value democratic freedom, this does not help them cope with the actual physical hardships resulting from the present economic and political crisis.

  Gorno-Badakhshan and the Soviet administration

  In the years prior to the end of the Soviet Union there were 53 national regional units with varying legal status on Soviet territory. Tajikistan was one of the 15 republics of the Union. A republic of the Soviet Union, according to the Soviet view, was a state with its own government, which did not, however, have sovereign powers (see Brunnen 1988: 25). The principle of decentralisation of decisions only operated on a superficial level, because ‘democratic centralism’ was enshrined in the constitution of the Soviet Union. The absolutely binding nature of decisions made by the higher authorities in Moscow applied to every part republic, de facto since the founding of the Soviet Union and also de jure

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  The Soviet Union 1984/85

  Events, Problems, Perspectives

  • Gertraud Seidenstecher, Karin Schmid(Authors)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  Opportunities for economic growth became scarcer in the 1970s and the process continued and became more pronounced in the 1980s. The reason for this was a decline in the supply of basic resources. As a result of this decline, Soviet economists felt compelled to revise their basic model of economic planning. Economic policy and practice had to be designed so that the planned results were achieved with a minimum expenditure of resources. Thus, more economical use of resources became the central theme of an "intensification campaign." In feet the word "intensification" today denotes as comprehensive and all-embracing a concept as did two other words in Soviet history: "electrification" and "industrialization." The parallel with industrialization was explicitly stressed by new secretary general Gorbachev.

  How successful has this intensification campaign been? So for, not very. According to D. Chernikov, deputy director of a Gosplan research institute, the role played by intensive factors in Soviet economic growth is not increasing, but has actually been diminishing. The share of productivity in the rise in national income dropped from 40 percent in 1966-70 to 25 percent in 1981-82.2 It follows that, despite all their vows to pursue a more intensive form of economic development, Soviet authorities have not succeeded in putting a stop to the increasing expenditure of resources and abandonment of the extensive form of economic development. Unless this changes, given smaller growth rates of resources, it will severely restrict the economic development of the country in the future.

  This is the real situation in which Soviet planners have to formulate their economic strategy and tactics for the second half of the 1980s and work out their next five-year plan, the twelfth.

  Investment: The Focus of the Decisionmakers

  In both theory and practice the Soviet leadership focuses particular attention on its investment policy. The problems of labor and natural resources, in contrast, have always been of secondary importance to Soviet decisionmakers. This becomes evident from sources such as technical Soviet economics books and Gosplan methodological instructions on the preparation of five-year plans. Even now, in spite of the increasing severity of the labor shortage and the growing difficulties in securing supplies of raw materials, the earlier attitude towards economic resources has hardly changed. The scarcity of labor and natural resources is accepted as something unavoidable, as something that has objective causes and is simply impossible to combat. The labor shortage is attributed to a reduction in the population's growth rate, which in turn is supposedly nothing more than a consequence of the Second World War. The scarcity of natural resources is ascribed to the exhaustion of old deposits in the western parts of the country (oil in Azerbaijan and the Volga region, coal in the Don basin, iron ore in the Urals, etc.) and the consequent shift in the country's fuel and raw material basis to the eastern regions, where the expansion of production involves difficulties in opening up new territories under harsh climatic conditions.3

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  The East European Economies in the 1970s

  Butterworths Studies in International Political Economy

  • Alec Nove, Hans-Hermann Höhmann, Gertraud Seidenstecher(Authors)
  • 2013(Publication Date)
  • Butterworth-Heinemann

    (Publisher)

  The great new Baikal-Amur railway project is intended to provide access to important sources of fuel, minerals and timber in East Siberia. But while all this is rational and, in the long run, likely to be a 23 years, the supply of goods and services has risen much more slowly than the incomes of the population'. One way of measuring the impact of this 'inflation a la sovietique' is the growing gap between official and free-market prices of foodstuffs. These can be calculated as follows: USSR: Economic policy and methods after 1970 24 source of strength, in the medium term this represents a further burden on an overstrained economy, and not least on transport. The overloading of the railway network is among the major causes of recent difficulties. Reasons for poor economic performance The 1976-1980 quinquennium has been even more difficult than its prede-cessor, although, as Table 2.1 shows, the growth rate envisaged was below not only the planned but also the (lower) actual growth rates of 1971-1975. Indeed, 1979 proved to be one of the worst years of Soviet peacetime history, with considerable falls in the output of such important items as coal, steel, cement and fertilizer. There was also a bad grain harvest, but this has to be attributed to weather. There was some recovery in 1980, but, even so, the plan had been substantially underfulfilled in almost every particular. Soviet economic strategy during the 1970s, until 1979, in fact included the fullest utilization of the international division of labour, both with the capitalist world and within the CMEA countries. The huge increase in oil prices which occurred in 1973 added greatly to Soviet earnings of hard currency, as also did the rise in the price of gold. The availability of credits from Western countries and from the Eurodollar market also helped the USSR to finance a deficit due to the combined effects of increased purchases of Western equipment and of Western grain.

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