Economic decline

What were the growth rates in:

• 50s

• 60s

• 70s

• 7%

• 5%

• 3%

What had happened to the economic growth by thw 1980s?

It was in steady decline

why was the situation often worse than production figures indicated?

because output was usually expressed in the value of goods produced, and this was based on prices decided by the govenment

What could production figures be raised by?

a mere bureaucratic decision

What problems did the fixation with output mask?

• Quality of goods were sacrificed in push for quantity

• shoddy goods were of a constant complaint

• many goods were of such poor quality they were left to rot

What product in particular caused problems and why?

condoms contained more rubber than tires

What fraction of the US output for agriculture did the USSR produce?

1/6

What percent of the workforce did agriculture use?

What percent of investment?

• 25%

• 26%

What other problems did they cause?

waste and environmental damage

What were 6 reasons for the economic decline?

• The legacy of the Stalinist approach

• Problems inherent in a command economy

• The ‘social contract’

• Lack on investment

• Outdated technology

• The dominance of the military- industrial complex

In a command economy, where does the power largely reside?

In the centre of the government apparatus

Why could B be a reason for the economic decline?

Why not?

• his age rendered him immobile as the huge economy system, he had a cautious and conservative approach which had entrenched officials and administrators resistant to change

• He was just a product of the system he had inherited

What was the Stalinist approach focused on?

Growth in industrial output to bring about rapid industrialisation

What was made more difficult because of the highly centralised planning system laid down by Stalin?

the move towards efficiency and quality

Why were bureaucrats unwilling to change?

They had blossomed in the time of Stalin

What didn’t central control encourage?

creativity and initiative

What was seen as a threat to the power of the central planners?

experimentation at local levels by individual managers

What was preferred over growth?

Keeping Party officials happy

What proved too rigid and inflexible for the modern economy?

Central planning

What was the ‘social contract’?

an unstated but understood contract that the govt. would provide employment and reasonable standards of living in return for workers’ compliance

What did this make government unwilling to use?

The ultimate sanction of economic failure- the closure of factories and unemployment

What did the Soviet workers used to say?

‘We pretend to work and they pretend to pay us’

When did investment in agriculture increase?

during the Khrushchev and Brezhnev period

What was this unable to render?

The underfunding from the Stalin period

What did this mean that there were short supplies of throughout the Soviet Period?

Storage facilities, rural transport, reliable machinery

In what area of the economy were there Soviet successes?

Outdated areas such as steel, cement, oil and pig iron

Who had these productions exceeded by the end of the 70s?

USA

What were the USSR struggling to keep up with by the end of the 80s?

the technological advances being made in the West

What did B do which slightly helped, but didn’t solve the use of outdated methods?

The policy of coupling scientific institutions with industries

What did the USSR sign with the USA and what did it allow for them to have?

signed deals with them to gain access to new technologies-

What were examples of this?

Did it work?

• agreements made with Fiat and Renault to import car making technology to the USSR

• No- the impact rarely extended beyond the plant in which it was used

Describe the technology by 1980 in the SU?

old and physically worn out

What percent of soviet resources went to military- industrial complexes?

at least 18%

What was the population at this time?

How many people worked for the military industrial complexes?

• 150 million

• 30 million

What did B’s foreign policy involve increasing?

intervention in the developing world

What did this therefore make necessary?

expenditure on arms and defence

How come the economic decline became more obvious in the B period?

the command economy had performed well when the focus was on improving output of a limited number of products but was far less effective when continued growth depended on gains in quality and efficiency

What had happened to the system?

It had become increasingly complex and overburdened