Brief History of the USSR

1. Ideals of socialism, as developed by Marx and Engels, contained few specifics.
 They focused on a utopian state where everyone was equal and satisfied.
 Marx assumed that only labor could produce value, not land or capital. ince owners of
land and capital received part of the value of output it followed that they must be
stealing it from labor.
 Marxism was a theory of stages! socialism was to succeed the most developed stages of
o "enin was immediately faced with the reality of socialism.
 The #ommunist $arty came to power in underdeveloped and bac%ward &ussia, rather
than in an advanced western capitalist economy.
 The constraints of scarcity were glaringly apparent and demanded immediate decisions.
 "enin's (olshevi%'s were a small group that sei)ed power due to the disruption of
*orld *ar I, they chose to rely on force and violence to consolidate their power.
o +s history clearly records, "enin's choice was to emphasi)e two priorities,
 promote rapid economic development by stressing heavy industry, and
 produce the military might necessary to consolidate power.
 The method chosen by "enin was to control prices -particularly in agriculture. and to
control foreign trade.
o The benefits of this choice were reaped by "enin and the leadership of the party, in that they
were further able to consolidate their power.
o The opportunity cost of this choice was primarily borne by the peasantry.
 /overnment forced reductions of agricultural prices and restrictions on foreign trade
reduced agricultural income and the buying power of the peasantry.
 +vailability of consumer goods was drastically reduced.
 +gricultural production fell significantly.
 (etween 1012 and 1314, &ussia was one of the largest exporters of agricultural
goods and was called 5the granary of Europe!5 by the 1362s, the oviets were
heavily dependent on imported wheat.
 Their willingness to bear this cost rested on a combination of
 fear or unwillingness to resist coercion,
 suppressed consumer expectations and limited choices,
 inability to perceive other choices,
 the opportunity to see progress around them in the industrial sector,
 persistence of the dream of empire, and
 acceptance of the goals and philosophy of the &evolution.
o The political and economic bac%wardness of pre7&evolution c)arist life for most peasants
meant that the political7legal and economic legs of "enin's 547legged table5 held comparative
promise for many.
 The communist dream and the legacy of empire, re8uvenated by government
proclamations, provided a moral cultural strength that allowed the #ommunists to
9. The talinist period found governing officials facing the same economic constraints of scarcity. talin,
li%e "enin, had to ma%e choices about the use of resources for production and consumption.
o talin chose to force the collectivi)ation of agriculture and to drastically increase investment in
heavy industry.
 talin waged a brutal and bloody campaign to herd the peasants onto cooperatives and
requisition their harvests.
 More and more of the economy was brought under government planning, prices were
set, and private property was abolished.
 The government enforced mass movement of people and other resources to specific
o The benefit of this forced investment in industry was a rapid -but unbalanced. economic growth
in the late 1392s.
 :uring the ;irst ;ive <ear $lan -1390744., the economy grew =0>.
 $roducer goods grew 114>.
 Electric power grew 996>.
o The opportunity costs were, again, borne by the citi)ens, especially the peasantry.
 #onsumer goods production grew only 1>.
 "ivestoc% production declined ?0>.
 /overnment became increasingly secretive, coercive and unresponsive to oviet
citi)ens. Millions of people were either %illed or imprisoned during talin's purges.
 $ersonal and economic freedom were increasingly curtailed.
o @igh growth rates held through the 1342s and 13=2s, and talin maintained his choices in the
economic sphere, placing heavy emphasis on capital goods and military production, with the
resultant benefits and costs,
 The oviet Anion was able to withstand the onslaught of Ba)i /ermany in *.*.II and
continue a heavy military emphasis during the 13?2s and 12s.
 Important benefits were to reinforce the dream of empire and the willingness of
the populace to bear costs.
 /ratitude to the government for defeating the Ba)is lifted spirits even higher.
 ;orced emphasis on specific sectors of the economy was well suited for
accelerated growth of those sectors at the expense of others -often agriculture..
 This provided the opportunity for heavy investment in space exploration and
military innovation.
 The emphasis on capital and military goods necessitated a producer goods C
consumer goods choice that all but ignored the consumer.
 The willingness of citi)enry to bear costs continued, sustained by a combination of fear
and belief.
4. (y the late 13?2's, the economic gap between the A& and the *est had begun to widen! oviet
leadership for investment over consumption continued to impose heavy opportunity costs on
o #ontinued emphasis on industrial and military production perpetuated low living standards for
the masses of the people.
 Immediately following *.*.II, life for the average oviet citi)en was so miserable that
any improvement seemed significant. &apid growth during the 13?2s and 12s allowed
for some increases in consumption levels from those of the 1342s and =2s and these
increases purchased years of legitimacy and genuine support for the system.
 (y the 1362s and 02s, consumption production was virtually flat! the standard of living
of the average oviet citi)en did not change and prospects for future wealth seemed
less promising.
o In addition, advances 7 technological, economic, and military 7 were smaller than in the past.
 +fter 13?6, the oviet economy began to slow down.
 +verage 1> annual growth rates in the 13?2s slowed to under 9> in the 02s.
 This slow down is put into perspective when we reali)e that investment
spending remained extremely high and that it was fueled by the huge oil
revenues the oviet Anion received as a result of high world petroleum prices.
=. +s the #old *ar developed and escalated into the 1312s, leaders of the oviet Anion continued to face
the choice of how to use resources to promote their goals. The initial choice to invest heavily in capital
goods and military strength was coupled with a desire to wage a propaganda war 7 to show the rest of
the world and own citi)ens the prowess of the glory of the communist system.
o In the late 13?2s and early 1312s, the oviet Anion faced the choice of ma%ing a huge
investment in space technology, space exploration and science, diverting even more investment
from the production of housing and consumer goods.
o This choice to pursue applied science in the area of space technology was motivated by
 the hope of using space superiority for military purposes
 the desire to showcase the scientific genius of the oviet Anion by defeating the *est
in the space race.
o *hile military prowess could produce the same result, superiority would only be apparent in
war, something the A& wanted to avoid. pace exploration offered the opportunity to be an
undisputed international 5winner,5 without the debilitating costs of war.
o The putni%s, the shot at the moon, the photographing of the far side of the moon, and oviet
astronauts orbiting of the earth, together with atomic and hydrogen explosions, emphasi)ed the
achievements of oviet applied science, and in particular oviet roc%ets, missiles, and atomic
and space technology.
o In these fields, as in others, the oviet Anion profited from contributions of espionage and of
/erman scientists brought to the A& after *orld *ar II. The state financed and promoted
these extremely expensive technological programs and also organi)ed and paid for the search
for new natural resources necessary for the scientific endeavors.
o oviet military C industrial development in 13?2s712s,
 atomic bomb tested in 13=3
 military alliance with #hina signed in 13?2
 assisted the #hinese in the 13?47?= Dorean conflict.
 established the *arsaw $act in 13??
 suppressed a revolt in @ungary in 13?1
 tested an Intercontinental (allistic Missile in 13?6
 built the (erlin *all in 1311
 the world leader in steel production during the 1312s
 the firsts in space, the first satellite, the first satellite with an animal aboard, the first
moon roc%et, the first photo of the far side of the moon, the first man in space, the first
woman in space, the first man to wal% in space, the first flight around the moon and
return, the first experimental space station.
?. In hindsight, the beginning of the end is apparent by the early 1302s. :espite strictly enforced central
planning, the oviet system began to loo% as if it were out of control.
o The costs of negotiating and monitoring transactions among firms and regions became
extraordinarily high.
o *hile innovation in production techniques and new product development was providing much
of the rest of the world with higher quality products at lower prices, and was producing a virtual
revolution in computer and information technology, the oviet Anion was stalled with out7
dated production techniques, decades7old machinery, and inefficient communication.
o The system that had borrowed western technology to fuel its industrial growth seemed
incapable of entering the new information age.
o +gricultural output, in spite of heavy investments by Dhrushchev and (re)hnev, was declining.
o The western free world was moving farther and farther ahead, not only in much desired
consumer goods, but also in the showcase areas of military strength and space technology.
 +fghanistan defeat
 &eagan's 5tar *ars5 defense.
1. $erestroi%a was a last attempt to shore up a failing system, but by the mid 02s, the legs of the 47legged
table were wobbling.
o Economic reforms and renewed attempts to increase the growth rate couldn't head off continued
 The time and expense of negotiating exchanges continued to soar.
 #ontinued high investment in the military and heavy industry sustained limited gains in
consumer goods!
 Investment means resources were directed to industrial and military growth,
and thus ta%en away from consumer production. Investment in industry may
promise consumer production in the future, but for the present, it causes
standards of living to erode or stagnate.
 +gricultural problems became acute!
 :istributions from farms to cities were sporadic!
 Eil revenues declined dramatically.
o Ander /orbachev, $erestroi%a lowered the cost and raised the benefit of diverting resources
from the official sector to the informal economy.
 In the political7legal area, political control was used to deliver the privileges to the elite
 &ule of law was absent.
 The prosecuting attorney was also the 8udge.
 In the moral7cultural sphere, there was a loss of moral principles.
 #iti)ens believed that theft from the state was necessary and 8ustified.
o These economic problems were aggravated by the oviet people beginning to re8ect the secrecy
of their history and to question the communist plan and the dream that accompanied it.
o The cost of decades of choices to invest in industry and the military, to restrict individual
freedoms, and to remain isolated from western cultures and economies finally became more
than the #ommunist $arty and the people of the oviet Anion were willing to pay. The
structure collapsed.
6. +chievement of the regime, universal education.
o +t the time of the 1316 &evolution, &ussia was primarily an illiterate peasant society -illiteracy
rate was 6?>. with a primitive wor% force comprised largely of uns%illed manual laborers.
o In part because of a desire to teach about the writings of "enin and the achievements of
communism, but also to help move the country from an agrarian bac%ward economy to a world
power, schools and education were areas where the oviets invested heavily right from the
o (y 1302 the literacy rate was one of the highest in the world.
 In 13?2 there were 1.9 million university7level students in the oviet Anion!
 (y the mid71302s, that number had increased to over ?.= million students being taught
by half a million professors and instructors.
o (y 130? the oviet Anion had one of the largest bodies of scientific researchers in the world,
1.? million scientists doing research wor%.
o This emphasis on education produced both a blessing and a curse for the oviet Anion.
 (lessing, the level of literacy, the quality of the labor force and the %nowledge of the
leadership increased dramatically.
 #urse, the university educated, or intelligentsia as they were called in the oviet Anion,
became well7read in history and western thought. ;or this group blindness to the lies of
the past and unquestioning loyalty to the Marxist and "eninist ideals were no longer
o Fuestioning by the intelligentsia was perceived by oviet leaders as a threat! critics were
branded disloyal. talin conducted purges that sent many of the intelligentsia to concentration
camps in iberia, or in some cases even to death sentences.
o The force of education and the millions of individuals who were literally trained to question the
past helped to brea% the hold that the communist party had on the loyalties of oviet citi)ens.