While political dynamics played a large role in the collapse of the Soviet Union, economic breakdown was the main cause of its deterioration. Built on the Socialist ideology of state owned and run business, the declining Soviet economy was plagued by economic inefficiencies and corruption. The country suffered from decades of being tossed on the rough seas of inconsistent and capricious political leadership. The transformative thinking of Mikhail Gorbachev brought much needed change in policies, but the very reforms of perestroika that were meant to save the country from economic disaster perpetuated its demise (Strayer, 132).
Gorbachev was an honest, hardworking man with a genuine belief in the potential of socialism given the right direction. His rise in the Soviet government gave him considerable insight to the varied leadership styles of Breznev, Andropov, and Chernenko. Over time, he saw that his party’s ineffective and often corrupt leadership and failed policies called for serious reform in order to stop the threat of economic decline. He developed a plan that would provide a “qualitative new state of society” (93).
He pushed for a new level of candor called glasnost, a policy largely perceived as successful, that allowed transparency of government entities and removed barriers to open communication. A second key policy called “perestroika”, or economic restructuring, was considered far less successful (115).
This plan included decentralizing economic management by the state, introduction of small-scale private enterprise, and making individual enterprises responsible in part for their own products. Perestroika would change the Soviet economy, but not the way Gorbachev had hoped. Soviet industry had long depended on the state to set prices, wages, direct contracts, and determine what would be produced and in what quantity. When controls were substantially loosened and businesses given a percentage of their production to regulate on their own, uncertainty set in. The market model put in place under the policy of perestroika proved unsettling to people who worried for their jobs and business managers who were used to being told what to do by the state. Many state authorities made the situation worse by continuing to attempt to control production as before (117).
The Essay on A Balanced Economic State
In a socialist society the means of production are owned by the workers rather than by a rich minority of capitalists or functionaries. Such a system of ownership is both collective and individual in nature. It is collective because society can control production unlike the economic anarchy of capitalism and because production is for the common good rather than for individual profit. At the same ...
“A certain nostalgia for the stability and predictability of the Breznev era and even for the strong hand of Stalin, likewise surfaced amid the growing desperation of the late Soviet era.” (137).
Political forces outside of the weakening Soviet Union likely contributed to economic pressure. The United States in cooperation with Saudi Arabia undermined the economic reform effort by lowering the world price of oil and opposing Soviet oil and gas sales to Western Europe. Soviet oil exports dropped dramatically. “A drop in world oil prices in the mid-1980s surely damaged Gorbachev’s economic reforms by sharply reducing the country’s hard currency earnings” (127).
Subsidies to unprofitable enterprises grew as did unemployment and government spending (136).
A growing deficit resulted from government expenditures that were not supported by state revenues.
A rapidly growing black market, substantial unmerited wage increases, and currency printing contributed to inflation. Another new problem, unemployment, created fear among the Soviet population. Up until then, citizens had been guaranteed jobs under the communist regime (136).
The Soviet economy would prove to be almost beyond repair. The system was considered by some to be unreformable and “too far gone to respond to treatment” (121).
The society that took shape during these dramatic years was impoverished and experienced massive erosion in its quality of life. “Substantial segments of the population spent upward of 60, 70, or even 80 percent of their income on food, leaving little for other purchases.”(137) Fundamental to the economic crisis was the growing shortage of consumer goods and agricultural products.
The Essay on Why Do Bad Things Happer To Good People
Why do bad things happen to good people? Why do good things happen to bad people? These two questions have bewildered mankind throughout the centuries. Even the greatest philosophers and theologians have yet to develop a concrete answer. Philosophers, theologians, and even religious leaders have developed many hypotheses. Some of these hypotheses support each other while others conflict. It is for ...
Rationing coupons and long lines at stores for the most basic items became the new norm for Soviet citizens. The angry population saw themselves as victims of perestroika rather than recipients of its benefits. “By the time Gorbachev received the Nobel Peace Prize in 1990, an award that symbolized his massive international prestige; he had substantially lost the support of his own people” (137).
The policies of perestroika generated short term results that were at odds with their intended outcomes. Rather than giving life to a stagnant economy, it went into a tailspin. Instead of giving the Soviet people a chance to take on collaborative role in running businesses, it produced fear, uncertainty, and unemployment.
It created food and consumer good shortages as businesses chose to produce goods with higher profit potential. It caused inflation as wages rose and scarce consumer goods became more expensive. “Intended to renew economic growth, the policies of perestroika drove the economy toward collapse” (132).
With the economy hanging by a thread, and the Soviet people fed up, the stage was set for change. Sick and tired of living that way, the people of the Soviet Union and the Eastern European satellite states mobilized to create political change, marking the collapse of the Soviet regime.
Strayer, Robert W. Why Did the Soviet Union Collapse?: Understanding Historical Change Authored By: Robert Strayer. Armonk: M.E. Sharpe, 1998. Print.
