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I have heard from a number of different sources on this matter. The era of Brezenhev (sp?) 1964-1982 is regarded as an era of stagnation. However, his early years in power were a time of great prosperity for the USSR. Some sources say that the economy did well under Brzenehev until 1970, while other say the proposerity lastest until 1976. When did the Soviet Economy really begin its nosedive? Was it a straight nose-dive since then or where there a couple of good years in between? Secondly, why would the economy of the USSR do so well in the 1960's but not by 1980...was Brzenhev changing his policies? Or did the premier start off so well because of the prosperity from the Stalin and Khruchev eras? I have read the general theories on why the USSR collapsed, but what turned the tide? I am trying to pinpoint the exact time that the USSR economy was growing, by how much and when it declined.
I have not heard that the Soviet economy ever did well. And I suspect GDP growth over time was primarily tied to changes in energy or raw material components than anything else. One thing that is true, is that from the early seventies on the Soviet Union focused ever more income in military production and that had a very negative impact on the economy - particularly at the individual level.
Soviet economy was pretty good at growing its heavy industry and building up its infrastructure. In the 50s and 60s, in the aftermath of WWII, investing resources into infrastructure and heavy equipment made sense. Growing cities needed large amount of housing, electricity, transportation networks. Collectivized farms needed heavy machinery. Development of heavy industry temporarily improved the standard of living and ensured a relatively fast growth rate, until around mid-late 1960s.
Over time, however, dividends from capital goods began to decline. Not only because there is only so many "roads and bridges" and you can build, but also because people started demanding more and more consumer goods. Despite relative Soviet isolation, Western culture invariably seeped in and the Soviet people became aware that people in the West lived much better. They began to demand goods that Soviet command economy could not produce very well - cars, appliances like TVs and VCRs, good clothes, and meat. Demand for meat was especially difficult to satisfy because it put additional strain on Soviet agriculture which was never as efficient as in the West. More and more Soviet leadership was forced to buy many of these good from abroad. They got a break in late 1970s and early 80s in that oil prices spiked. By selling oil, USSR was able to obtain the currency needed to buy Western goods. When oil prices came down in the mid 1980, it was beginning of the end.
In short, the era of stagnation was as much psychological as a real phenomenon in that Soviet citizens realized that despite everything that was promised, their standard of living lagged far behind that of the west.
The Russian these days rises and falls with the price of crude oil.They have really never been able to recover from a generation that had black market so strong because the governamnt controlled econmy could not produce goods because their was no incentive for people to work harder.
The russian gdp grew faster from the mid-forties to the mid-sixties simply because it started from such an incredibly low level after WWII. The more developed your economy is, the harder rapid GDP growth as a percent of the existing economy is.
As others have stated, the Soviet economy was never that well oiled machine they liked to think it was. While they experienced fantastic growth early on, there really was no where for them to go but up. Overall the Soviet economic system is a case study in the military industrial complex.
The entire economy was hung on producing equipment for the military. The problem with this is that the money for the military came from oil revenues. The economy exploded in the '70's and the Soviets achieved what they had long hoped for, which was to surpass the west in military power. This situation was turned on them in the '80's when oil prices crashed (thanks to the Saudi's) and the U.S. ramped up military investment. The Soviets tried their best to keep up, but the economy was collapsing under the pressure.
It didn't hurt the whole situation that the average Russian took little solace in knowing his country had the most tanks, when he couldn't buy meat or bread. The disparity in the living standard between east and west placed further strain on the Soviet system. Gorbachev finally sounded the death knell when he instituted perestroika and glasnost and people were exposed more and more to western influence.
I guess the summation would be that the Soviets were really good at building weaponry, but they weren't good at much else. That situation can only be sustatined for so long, especially when your populace stops believing that the enemy is their enemy.
The soviet economy stressed quantity over quality and heavy industry over consumer industry even as the world economy changed. Its intense secrecy worsened this.
The soviet economy stressed quantity over quality and heavy industry over consumer industry even as the world economy changed. Its intense secrecy worsened this.
Ah, but comrade, "quantity has a quality all its own".
In Soviet Russia, you don't make famous quotes, famous quotes make you!
Yeah, the "quantity" was pretty selective as well. When Khrushev came to the US for a summit meeting, they gave him a tour of a supermarket...he accused us of staging it to show an artificial amount of goods!
When ya gotta stand in line for a loaf of bread or TP, something isn't right.
I should have said quantity was the goal. But by ignoring quality they helped insure neither happened. As for scarcity, and ingoring the horrific Soviet agricultural system, the Russian GDP was a fraction of the US. Yet it felt it must commit vast resources to keep up with the US in the Cold War. When you do that you will skimp on everything else.
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