I don't think I have a lot to say here, but this relatively stupid question has been bothering me a bit lately, so I want some answers. Is it just lies/exaggerations? Or the clear fault of reforms? What should have been done? Any books or information about this?
I would suggest maybe "Perestroika" by Harpal Brar
What about Hoxha's Albania (well it was anti-revisionist)? And thanks, I'll look into it...maybe any links?
C'mon guys, help me out here. I think I also read somewhere that Stalin planned to increase consumer and light industry production after the industrialisation was complete (was this in the 'problems of socialism'? I have to read it again)-- if this is true, then it must certainly mean that the stagnation was atleast partially caused of the later-era heavy industry lobby?
Well it depends what you mean by stagnation. In the 20's and 30's Stalin an the CPSU made the decision to put all the resources into the rapid development of heavy industry because it was a neccesity for survival to have the industrial basis for a modern war machine capable of defending against capitalist aggression. This was done with breathtaking, phenomenal speed and success. By the time the War finally came around, Soviet heavy industry was so advanced it was producing what was recognised even by the Germans as the best Tank in the world (my av!). Because consumer product production wasn't as spectacular during this period doesn't mean stagnation. It wasn't pursued. I'll post more about the period after Stalin later.
¿Have you seen "Russia: from Revolution to counterrevolution Part Six: The Period of Stagnation" http://www.marxist.com/russiabook/part6.html
Economic Factors in the failure of Soviet Socialism Paul Cockshott was asked by Gen. Jose Angel to elaborate on remarks made about the economic causes of Soviet Collapse. This is a very brief personal perspective on what is obviously a huge and very controversial subject. The collapse of the Soviet and later the Russian economy under Gorbachov and then Yeltsin was an economic disaster that was otherwise unprecedented in time of peace. The world's second super-power was reduced to the status of a minor bankrupt economy with a huge decline in industrial production and in living standards. Nothing brings out the scale of the catastrophe than the demographic data which show a huge rise in the mortality rate brought about by poverty, hunger, homelessness and the alcoholism that these brought in their wake. Soviet Economic collapse let to huge increase in mortality with 5.7 million Excess Russian deaths 1991-2001. Vertical axis 1,000 deaths per annum. In determining what caused this one has to look at long term, medium term and short term factors which led to relative stagnation, crisis and then collapse. The long term factors were structural problems in the Soviet economy and required reforms to address them. The actual policies introduced by the Gorbachov and Yeltsin governments, far from dealing with these problems actually made the situation catastrophically worse. Long Term --------- During the period from 1930 to 1970, and excluding the war years, the USSR experienced very rapid economic growth. There is considerable dispute about just how fast the economy grew, but it is generally agreed to have grown significantly faster than the USA between 1928 and 1975, with the growth rate slowing down to the US level after that4. This growth took it from a peasant country whose level of development had been comparable to India in 1922, to become the worlds second industrial and technological and military power by the mid 1960s. Observers have given a number of reasons for this relative slowdown in growth in the latter period. It is easier for an economy to grow rapidly during the initial phase of industrialisation when labour is being switched from agriculture to industry. Afterwards growth has to rely upon improvements in labour productivity in an already industrialised economy, which are typically less than the difference in productivity between agriculture and industry. A relatively large portion of Soviet industrial output was devoted to defence, particularly in the latter stages of the Cold War, when they were in competition with Regan's 'Star Wars' programmes. The skilled manpower used up for defence restricted the number of scientists and engineers who could be allocated to inventing new and more productive industrial equipment. The USA and other capitalist countries imposed embargoes on the supply of advanced technological equipment to the USSR. This meant that the USSR had to rely to an unusually high degree on domestic designs of equipment. In the west there were no comparable barriers to the export of technology so that the industrial development of the western capitalist countries was synergistic. Labour was probably not used as efficiently in Soviet industry as it was in the USA or West Germany. In one sense, or course he USSR used labour very effectively, it had no unemployment and the proportion of women in full time employment was higher than in any other country. But a developed industrial economy has to be able transfer labour to where it can be most efficiently used. Under capitalism this is achieved by the existence of a reserve of unemployment, which, whilst it is inefficient at a macro-economic level, does allow rapid expansion of new industries. The Soviet enterprise tended to hoard workers, keeping people on its books just in case they were needed to meet future demands from the planning authorities. This was made possible both by the relatively low level of money wages, and because the state bank readily extended credit to cover such costs. The low level of money wages was in turn a consequence of the way the state raised its revenue from the profits of state enterprises rather than from income taxes. Although Soviet industrial growth in the 80s slowed down to US levels, this by itself was not a disaster, after all the USA had experienced this sort of growth rate (2.5% a year) for decades without crisis. Indeed whilst, working class incomes in the USA actually stagnated over the 80s, in the USSR they continued to rise. The difference was in the position of the intelligentsia and the managerial strata in the two countries. In the USA income differentials became progressively greater, so that the rise in national income nearly all went to the top 10% of the population. In the USSR income differentials were relatively narrow, and whilst all groups continued to experience a rise in incomes, this was much smaller than had been the case in the 1950s and 1960's. This 2.5% growth was experienced by some of the Soviet intelligentsia as intolerable stagnation – perhaps because they compared themselves with managers and professionals in the USA or Germany. A perception thus took root among this class that the socialist system was failing when compared to the USA. Again this would not have been critical to the future survival of the system were it not for the fact that these strata were disproportionately influential within the USSR. Although the ruling Communist Party was notionally a workers party, a disproportionately high proportion of its members were drawn from the most skilled technical and professional employees, manual workers were proportionately under represented. The slowdown in Soviet growth was in large measure the inevitable result of economic maturity, a movement towards the rate of growth typical of mature industrial countries. A modest programme of measures to improve the efficiency of economic management would probably have produced some recovery in the growth rate, but it would have been unrealistic to expect the rapid growth of the 50s and 60s to return. What the USSR got however, was not a modest programme of reform, but a radical demolition job on its basic economic structures. This demolition job was motivated by neo-liberal ideology. Neo-liberal economists, both with the USSR and visiting from the USA promised that once the planning system was removed and once enterprises were left free to compete in the market, then economic efficiency would be radically improved. Medium Term ----------- The medium term causes of Soviet economic collapse lay in the policies that the Gorbachov government embarked on in its attempts to improve the economy. The combined effect of these policies was to bankrupt the state and debauch the currency. One has to realise that the financial basis of the Soviet state lay mainly in the taxes that it levied on turnover by enterprises and on sales taxes. In an effort to stamp out the heavy drinking which led to absenteeism from work, and to poor health, the Gorbachov government banned alcohol. This and the general tightening up of work discipline, led, in the first couple of years of his government to some improvement in economic growth. It had however, unforeseen side effects. Since sales of vodka could no longer take place in government shops, a black market of illegally distilled vodka sprang up, controlled by the criminal underworld. The criminal class who gained money and strength from this later turned out to be most dangerous enemy. Whilst money from the illegal drinks trade went into the hands of criminals, the state lost a significant source of tax revenue, which, because it was not made up by other taxes, touched off an inflationary process. Were the loss of the taxes on drinks the only problem for state finance, it could have been solved by raising the prices of some other commodities to compensate. But the situation was made worse when, influenced by the arguments of neo-liberal economists, Gorbachov allowed enterprises to keep a large part of the turnover tax revenue that they owed the state. The neo-liberals argued that if managers were allowed to keep this revenue, they would make more efficient use of it than the government. What actually ensued was a catastrophic revenue crisis for the state, who were forced to rely on the issue of credit by the central bank to finance their current expenditure. The expansion of the money stock led to rapid inflation and the erosion of public confidence in the economy. Meanwhile, the additional unaudited funds in the hands of enterprise managers opened up huge opportunities for corruption. The Gorbachov government had recently legalised worker co-operatives, allowing them to trade independently. This legal form was then used by a new stratum of corrupt officials, gangsters and petty business men to launder corruptly obtained funds. Immediate --------- The Soviet economy had gone through the stages of slowdown, mismanaged crisis and now went into a phase of catastrophic collapse, quite unprecedented in peacetime. Following a failed coup by sections of the armed forces and security services, Yeltsin, instead of helping restore the constitutional government of President Gorbachov, seized power for himself. Acting on the instructions of US advisers he introduced a shock programme to convert the economy from socialism to capitalism in 100 days. In the old USSR there was no capitalist class. In the west governments could privatise individual firms by selling them off on the stockmarket where the shares would be quickly snapped up by the upper classes, or in the case of Thatcher's privatisation, by sections of the middle class. But in the USSR things were very different. There was no class of individuals wealthy enough to buy up state companies by legal means. Also the scale of the privatisation was so vast, that even in a market economy, the savings of the population would have been insufficient to buy up the entire industry of the nation. Logic alone would predict that the only way that industry could pass into private hands was through corruption and gangsterism. This is exactly what happened, a handful of Mafia connected oligarchs ended up owning most of the economy. Neo liberal theory held that once enterprises were free from the state, the 'magic of the market' would ensure that they would interact productively and efficiently for the public good. But this vision of the economy greatly overstated the role of markets. Even in so called market economies, markets of the sort described in economics textbooks are the exception – restricted to specialist areas like the world oil and currency markets. The main industrial structure of an economy depends on a complex interlinked system of regular producer/consumer relationships in which the same suppliers make regular deliveries to the same customers week in week out. In the USSR this interlinked system stretched across two continents, and drew into its network other economies : East Europe, Cuba, North Vietnam. Enterprises depended on regular state orders, the contents of which might be dispatched to other enterprises thousands of miles away. Whole towns and communities across the wilds of Siberia relied on these regular orders for their economic survival. Once the state was too bankrupt to continue making these orders, once it could no longer afford to pay wages, and once the planning network which had coordinated these orders was removed, what occurred was not the spontaneous self organisation of the economy promised by neo-liberal theory, but a domino process of collapse. Without any orders, factories engaged in primary industries closed down. Without deliveries of components and supplies secondary industries could no longer continue production, so they too closed. In a rapid and destructive cascade, industry after industry closed down. The process was made far worse by the way the unitary USSR split into a dozen different countries all with their own separate economies. The industrial system had been designed to work as an integrated whole, split up by national barriers it lay in ruins. The following figures show how far the economy had regressed. These figures show how little recovery there had been, even after 13 years of operation of the free market. Output of Selected Branches of Industry in Russia in 2003 Compared to 1990 (1990 = 100) Total Industry 66 Electric power 77 Gas 97 Oil extraction 94 Oil refining 70 Ferrous metallurgy 79 Non-ferrous metallurgy 80 Chemicals and petrochemicals 67 Machine building 54 Wood and paper 48 Building materials 42 Light industry 15 Food 67 Source: Goskomstat, 2004, Table 14.3. If the economy had continued to grow even at the modest rate of the later Brezhnev years ( say 2.5%) then industrial production would, on this scale have stood at 140% of 1990 levels. The net effect of 13 years of capitalism was to leave Russia with half the industrial capacity that could have been expected even from the poorest performing years of the socialist economy.
Thanks, I'll read these.
the economies of anti-revisionist nations (Stalin' USSR and Hoxha's Albania) had incredible growth. Hoxha and Stalin rebuilt devastated pastoral nations and turned them into industrial states and Hoxha's Albania became entirely self-sufficient. The USSR only faced stagnation with the revisionist takeover. Khruschev's failure in the Virgin Lands strategy and the failure of the maize crop. Brezhnev's official policy of zastoy (russian word meaning stagnation) for the economy was the poison into the veins of Soviet production that had been forged twenty years earlier by Stalin. Brezhnev turned a blind eye to rampant gangsterism and corruption in the management of the economy in order to conceal those problems instead of taking them head on as Stalin or Hoxha would have. Gorbachev's economic "reforms" opened Soviet markets to capitalist goods that undercut the prices of Soviet goods and spelled doom for the socialist economy that struggled under the weight of revisionist poison.
I've been told that Gorbachev's economic reforms were intended to rescue the Socialist system---obvious trash. I've also been told that the Soviet Union somehow borrowed money from the West--never heard this from a reputable source, and either way I highly doubt it. I just wanted to get that off my chest. In any case, this has really cleared things up for me as to what caused the economic issues in the USSR.
I think I should write a short summary on this, including info from books like 'restoration of capitalism', etc.
That would be great! As Brad said, this thread was very informative and cleared up some things for me, too.
