Systemic problems led to economic collapse of USSR, say experts

Asia's Tech News Daily

According to associate professor of the Department of History at the Moscow State University Andrei Shadrin, the Soviet economy no longer met the demands of the society and the state, including the military

MOSCOW, December 8. /TASS/. The Soviet economic pattern had reached its limits by the end of the 1970s, experts polled by TASS believe. They found it difficult to separate among the reasons for the Soviet Union collapse only political or economic ones, saying that a systemic crisis led to a collapse of the Soviet state, whereas economists and political analysts have not so far arrived at a consensus.

Thirty years ago, on December 8, 1991, an agreement dissolving the Soviet Union was signed in the Belovezhskaya Pushcha (a national park in Belarus). The agreement stipulated that the Soviet Union as a subject of international law and a geopolitical reality ceased to exist, and the Commonwealth of Independent States was established. The document was signed by the leaders of the Russian Soviet Federative Socialist Republic and the Belarusian and Ukrainian Soviet Socialist Republics Boris Yeltsin, Stanislav Shushkevich and Leonid Kravchuk.

“Some scientists share the view that the system of totalitarian communism has started to destroy itself due to the low level of people’s standard of living, the general crisis of the economic pattern, the suppression of the economic initiative, the centralized management system and red tape. Others suggest that it was all the fault of the differences in the ruling elite. Some say that the socio-economic crisis was artificially triggered by an arms race, naming the defeat in the Cold War as the reason for the collapse of the Union. The truth is somewhere in the middle, as usual, with a logjam of systemic problems leading to the fall,” President of the Free Economic Society of Russia, President of the International Union of Economists Sergey Bodrunov said.

Economic chances existed

The absoluteness of “the end of the USSR” was not innated in its DNA, its reasons were not an incurable pathology, Bodrunov said.

“Many experts and even western economists and politicians share this view. Particularly, Margaret Thatcher who served as British Prime Minister in 1990, when addressing American oil producers in 1991 acknowledged that the percentage of the Soviet Union’s national gross product growth was twice as high compared with the west, and considering its huge natural resources, the country had real opportunities to squeeze western countries from the global markets if it used rational economic management,” he explained.

Even in the last years of the existence of the USSR, the Soviet economy was the world’s second-biggest in terms of gross value after the US, accounting for roughly 50% of the US economy, the expert added.

Rector of the European University Vadim Volkov thinks that it was possible to avoid the economic collapse with the help of reforms at the end of the 1960s – the beginning of the 1970s. “Probably, through the introduction of elements of the market economy, another motivation system, another management system, certain decentralization, probably, it was possible to avoid it. And maybe it was possible to avoid it if there was no boosting of defense expenditures at such scale, meaning the arms race also killed the Soviet Union,” he noted.

It is also necessary to take into account the fact that the Soviet economy of the 1970s-1980s was much stronger than that of the 1920s, though it did not save it from degradation, Associate professor of the Department of History at the Moscow State University Andrei Shadrin said. Consequently, the expert believes that the reason was not only the economy, but the policy pursued by the authorities as well.

“Clearly, the Soviet economy of the 1970s was several-fold stronger, more capable of existing than in the 1920s. Nevertheless, the country did not dissolve in the 1920s, it did not degrade, whereas in the 1970s the opposite occurred. This means that the issue was not the economy, but in the politics it pursued,” he said.

China-like reforms could have saved the situation

According to Shadrin, the Soviet economy no longer met the demands of the society and the state, including the military. As a result, the level of people’s confidence in the authorities fell.

Bodrunov suggests it was possible to avoid both a sharp drop in the quality of life in the country and the collapse of production, particularly considering the fairly high level of the USSR’s technological development and its huge potential. “One of the alternatives, and both foreign and Russian experts write a lot about it, was to move the way China did, which managed to transform the economy into a market controlled by the state,” the economist explained.

Yuri Andropov came to power in 1982 and tried to cope with the situation through setting the task of increasing labor efficiency.

Andropov drafted reforms, mainly aimed at recovery of centralized planning, the way it used to be with Stalin, coupled with financial incentives, the development of individual labor activities, more differentiated payment for labor, with even such issues as attracting foreign capital set,” Shadrin said.

Andropov failed to implement those plans, concurrently China started developing such reforms as well.

“China’s position at the time could be compared with some African countries. Can you imagine what those reforms transformed China into? This fantastic transformation base on the pattern that we started talking about, could have also occurred in the Soviet Union. But it never happened,” Shadrin noted.

Nostalgia for equality, strong power

Even after 30 years have passed, some Russians and CIS citizens still feel nostalgia for the Soviet Union due to the demand for the restoration of social fairness.

“The thing is that in an attempt to withdraw from the Soviet system we have come to a society of deep social heterogeneity as the so-called ‘excessive’ inequality emerged in Russia. Interestingly, the Russians refer to the recovery of social fairness as one of the most relevant problems as it is one of the main demands of the society, which is proved by numerous sociological researches,” Bodrunov said.

“But I think that the collective memory on belonging to a huge state in the past, to a strong power that had force in the world, unites many, both in Russia and in former Soviet republics,” the economist added.

“Because they felt very good about themselves there. Basically, all the problems of the Soviet Union boil down to the deficit. If there had been no deficit, it would have been, in principle, fine,” Shadrin concluded.

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