How far did economic policy change between 1953 and 1985?

What did destalinisation move the economy towards?

a focus on consumer goods and agriculture

What was there a focus on within industry under Khrushchev?

light industry, chemicals and consumer goods

What is light industry?

manufacturing goods, often household products and directly impacts living standards

What would help create social stability under Khrushchev?

- reduction in terror to subdue population
- improving living standards through greater access to consumer goods

What were people to do with heavy industry known as?

'metal eaters'

What would the shift in industry under Khrushchev do?

broaden the economic base and bring real benefits to Soviet people ('workers paradise')

What stifled initiative? (challenge to Krushchev)

- vast bureacratic system of administrators in Moscow
- atmosphere of terror and harsh labour laws such as fines for abstenteeism carried on from Stalin

What made it difficult to deal with new trends and unforeseen events? (challenges to Khrushchev)

- system was clumsy and wasteful
- inflexible to meet needs

What had kept living standards low before Khrushchev?

intense military spending

What did Khrushchev do in 1957 to attempt to move decision-making from centre to regional bases?

set up 105 Regional Economic Councils (Sovnarkhozy) to supervise enterprises = tailored to demands

What was removed under Khrushchev and how much were working hours reduced in 1960?

- harsh labour laws
- from 48 hour weeks to 41 hours

What did incentives replace under Khrushchev?

Stalin's policy of coercion

How were industrial managers given more influence under Khrushchev?

- Khrushchev disliked them being 'robots of Moscow'
- allowed them to keep 40% of profits to invest in new enterprise

What showed emphasis on vocational education under Khrushchev?

specialist technical schools were set up

What were many of Khrushchev's reforms promoted by?

Evsei Liberman

What did the 1962 Liberman Plan do?

allowed for greater autonomy for local managers and the market to replace state as decider of prices

What years was the Seven-Year Plan?

1959-65

What encouraged the government to push ahead with transforming fuel and chemical industries? (SYP)

the discovery of new natural resources → especially in Volga-Ural fields

What was coal shifted to? (SYP)

oil and natural gas (cheap and abundant)

What would stimulate agriculture and consumer goods? (SYP)

focus on chemical production

How much synthetic fibre was produced in 1958, what was the goal for 1965 and how much was produced 1965?

1958 = 166,000
goal for 1965 = 666,000
1965 = 407,000

How did the SYP promote regional development?

areas east of Urals received over 40% of available investment

What did Khrushchev boast to the West in 1959?

"We will bury you"

Explain the Soviet pride causes (achievements to do with space)?

- Sputnik, first space satellite, launched 1957
- first dog in space
- Yuri Gagarin, first man in space 1961

What were the failures of the Seven-Year Plan?

-targets met but useless products were common
- consumer goods = more abundant BUT quality often poor
- division of Party apparatus into industrial and agricultural 1962 added to confusion
- poor labour productivity, inefficiency and waste
- by 1964 economic growth had slowed -> spending on consumer goods reduced and housing programme cut back
→ resistance from Party bureaucrats and influence of military-industrial complex = reforms watered down/ignored

What were two examples of loss of quality to meet targets? (SYP)

- shoe factory produced target of shoes, but all had the heel nailed to the toe
- made expensive sofas but less of them to reach targets - people couldn't afford them

What was the annual growth of the Soviet economy in the 1950s?

7.1%

What was the annual growth in the US in the 1950s and why was the Soviet economy still behind?

- 2.9%
- Soviet economic base was smaller

What did the sovnarkhozy experiment do?

- made national planning more difficult
- Gosplan overwhelmed but less influence to direct decisions

Why was Khrushchev committed to raising the priority of agriculture in the Soviet economy?

- had a peasant background
- considered himself an expert
- made genuine attempts to meet peasants on collectives
- would raise living standards and grow industry

What happened to collectives in 1955?

- individual collectives given greater powers to make decisions at local level → allowed flexibility over how directions from Ministry of Agriculture were implemented

Explain the MTSs being abolished.

- peasants hated them
- replaced with the naïve view that expected collectives to buy their own machinery

Explain the size of collectives increasing under Khrushchev

- many became large agro-industrial villages (Agrogoroda)
- linked food production with processing = greater economies of scale and investment
- rapid increase in mechanisation, fertilisers and irrigation 
= deeply unpopular

Explain the changes in state procurements and compulsory seizure of food under Khrushchev

- prices for state procurements increased
- compulsory seizure of food replaced by planned state purchases = designed to encourage greater productivity

Explain greater concessions given to peasants under Khrushchev

- allowed to sell produce from private plots at private markets - encouraged peasants to grow more food and important role in ensuring more food supplies for the population - productivity higher = nearly all eggs came from private plots

When was the Virgin Lands Scheme introduced?

1954

What did the Virgin Lands Scheme do?

encouraged the opening up of new areas to agricultural production

Who were sent to work in areas such as Siberia and Kazakhstan? (VLS)

volunteers, often members of the young Communist league (Komsomol)

How many acres brought under cultivation, and tractors provided? (VLS)

6 million acres, over 120,000 tractors provided

How was Khrushchev successful in his agricultural reforms?

raised status of agriculture in Soviet economy - was now back in the centre of economic planning

How much did incomes of farmers increase 1952-1958? (BUT)

- doubled
- still far below industrial workers

How much did food production increase 1953-58? (BUT)

51% but productivity remained low

Why were problems not remedied under Khrushchev?

investment did not increase enough - caused by years of under-investment

What were some of Khrushchev's policies viewed as?

'hare-brained schemes'

Why couldn't the economy cope with the 1963 poor harvest?

poor roads and inadequate storage facilities

What meant that millions of livestock were slaughtered under Khrushchev?

shortage from crop harvests impacted animal fodder supplies

What was the first sign Khrushchev's policy was failing?

- 1959 grain production for Kazakhstan failed to be met - land dry and only suitable for grazing - successful cash crops (e.g cotton) replaced by food crops in a 'maize manic' but no irrigation meant plants died

What was the ultimate sign of Khrushchev's agricultural failure?

the USSR had to import grain from North America and Australia

What contributed to Khrushchev's dismissal in 1964?

had placed a lot of his reputation on agricultural success and this failed to uphold due to failures of his economic policy

What did Khrushchev's dismissal lead to?

abandonment of most contentious policies

What did reformers push for and who resisted? (after 1964)

further attempts to stimulate creativity and innovation and improving productivity → resisted by conservatives who preferred to stick to methods of Stalin's command economy

What happened 1965?

new leadership abolished Regional Economic Councils set up by Khrushchev and placed more power back into centre

Who were given greater powers of co-ordination after 1964?

Gosplan → system echoed that of Stalin and showed influence lay with conservatives (some reformers remained)

What did Prime Minister Alexei Kosygin do in 1965?

launched series of reforms → aimed to unleash creativity and improve productivity

What did Kosygin's reforms do?

- gave incentives to enterprise managers to use resources more productively
- attempted to make central planning take more notice of cost and profit rather than Stalinist approach of using quantity produces as main indicator of economic success

Why was little achieved with the Kosygin reforms?

- reformers had influence at top but reforms implemented by unenthusiastic and often hostile officials
- central planners disliked reforms that gave them accountability for policies they had less control over

Why were the Kosygin reforms watered down to the point of ineffectiveness?

Brezhnev sympathised with conservatives and sabotaged reforms

What did focus on bonuses in the Kosygin reforms do?

- bonuses of profit encouraged enterprises to make fewer, more expensively-priced items rather than mass produce cheaper, and often much needed items
- bonuses for output higher than for 'innovation' so managers preferred to stay with safe and tried methods

What happened to Kosygin in 1968?

side-lined by Brezhnev, given a role in foreign affairs

What reforms were there in 1973 and 1974? (Kosygin reforms)

- 1973 major industrial complexes joined with scientific research institutions in attempt to ensure latest technology was applied to production
- 1974 system of targets further centralised → attempted to move away from output figures to focus more on cost and profit 

Why were the reforms under Brezhnev little more than tinkering with the system?

- attempts to adopt new technology limited by rigid nature of command economy
- managers feared losing production whilst new machinery installed = new equipment left to rust
- use of cost and profit indicators not always helpful in economic system where prices set by government, little reference to supply and demand

Brezhnev talked of " A A O T W C W S "

"an alliance of the working class with science"

When was the Ninth Five-Year Plan?

1971-75

What was continued by Brezhnev and what did emphasis on this do?

Khrushchev's push for greater consumer goods → emphasis meant goals not fulfilled BUT impressive growth and risen living standards

By 1980 what percentage of families had televisions, and washing machines?

85% televisions
70% washing machines

What percentage of families had a car and why was this fine?

only 9% but high investment in public transport

What did Brezhnev persuade 'metal eaters'?

resources must be given to consumer industries and agriculture

What was the influence of the military-industrial complex?

so powerful it often took decisions without informing other Politburo members

What was reversed and who was power returned to? (agriculture under Brezhnev)

Khrushchev's decentralising reversed, power returned to Ministry of Agriculture

What was dropped? (agriculture under Brezhnev)

Virgin Lands Scheme

By 1976, what percentage of investment was in agriculture and what did this mean?

26% → fertilisers received particular attention, Brezhnev prepared to allow  a bigger role for production on peasant private plots

What was the result of agriculture during Brezhnev?

steady rise in overall production, steady decline in worker productivity

Why was there a decline in worker productivity? (agriculture under Brezhnev)

- agricultural workforce was large and unskilled
- equipment and machinery prone to breaking down
- roads impassable, much food rotted before reaching market

What did failure of food production to meet rising demand do and what was this made up by? (agriculture under Brezhnev)

caused a shortage of foodstuffs available in state shops made up by private production as peasants sold their garden produce at private markets for considerably higher prices

By 1978 what were the prices of private markets compared to public shops?

many prices of private markets were double that of the state shops

What percentage of cultivated area were private plots and what percentage of food production was from them? (agriculture under Brezhnev)

1%, 25%

How did the government experiment with ways to raise productivity? (agriculture under Brezhnev)

- brigade system introduced
- allowed peasants on collectives to form work brigades that could decide how profit was used and distributed

What was the theory about the brigade system?

it would act as an incentive by bringing in an element of payment-by-results for the briage and individuals within

Why was the brigade system abandoned?

signs that this method was successful worried Party officials, who feared a return to family farming

What were the signs of failure of agriculture under Brezhnev?

- little was changed to a system of agriculture dominated by high levels of investment and inefficiency
- key sign = continued import of US wheat

Nove " T M G A S I H H "

"The most gigantic agricultural subsidy in human history"

What was Andropov's viewpoint of the economy?

- recognised need for reform 
- rather than change the system, wanted a tougher, more disciplined approach

What was the focus of Andropov's economic policy?

removal of corruption

What happened to large amounts of material under Andropov and give an example.

- were literally stolen from state enterprises and diverted into private production for the black market
- making dresses a few cm shorter → saved fabric for private production and target for state factory still met

Why and how did Andropov wish to improve labour discipline and what did it achieve?

- Soviet workforce suffered from widespread absenteeism and alcoholism
- government officials conducted spot checks looking for slackers (did not make him popular)
- added to resentment many felt towards government

What did Andropov encourage?

people to come forward with new ideas for improving production (what do you say to a former head of KGB?)

What was the economic growth rates in the USSR in the 1950s, 1960s and 1970s?

1950s = 7%
1960s = 5%
1970s = 3%

Why was the economic situation often worse than production figures indicated?

output was usually expressed in terms of the value of goods produced, based on prices decided by the government - prices could be raised by a bureaucratic decision

What did the fixation with output within the economy mask?

serious underlying problems with economic performance

Explain quality being sacrificed within the USSR's economy in a push for quantity.

- hid poor levels of productivity 
- shoddy goods meant constant complaints - many such poor quality they were left to rot in storage
- common grumble = Soviet condoms contained more rubber than car tyres
- waste and economic damage was a serious problem

Why could responsibility for the economic decline be placed with the Party leadership?

- due to a command economy where power resides largely at the centre
- Brezhnev = fitting symbol of failure to act, age meant he was immobile
→ cautious, conservative approach entrenched Party officials and administrators

Explain the legacy of the Stalinist system as a reason for economic decline.

- Stalinist approach geared towards rapid growth in industrial output
- move towards efficiency and quality more difficult to achieve in highly centralised system of planning laid down in Stalin period
- bureaucrats were resistant to change

Explain the 'social contract' as a reason for economic decline.

-unstated but understood contract that the government would provide employment and reasonable standards of living in return for workers' compliance
- made government unwilling to use sanction of economic failure and unemployment
→ resulted in large numbers of unproductive workers

Soviet worker's saying
" W P T W A T P T P U "

"We pretend to work and they pretend to pay us"

Explain lack of investment as a reason for economic decline.

- investment in agriculture under Khrushchev and Brezhnev but was not enough to address the chronic underfunding under Stalin
- storage facilities, rural transport and reliable machinert in very short supply

What were the problems inherent in a command economy?

- central control did not encourage initiative and creativity - experimentation at local level perceived as a threat and reforms encouraging decentralisation thwarted
- under Brezhnev, leadership preferred to keep officials happy than achieve growth
- use of government to set prices and costs and measuring economic performance did not help identify or solve inefficiency issues
- central planning too rigid and inflexible → production all decided at centre
→ e.g targets for women's bras of each size were decided by 'the Plan'

Explain the outdated technology as a reason for economic decline.

- Soviet successes had been in areas that were becoming outdated
- Soviet production of steel, cement, oil and pig iron exceeded USA by end of 1970s - elements of industrial but not post-industrial power
- by 1980s USSR struggled to keep up-to-date with Western technological advances → Brezhnev's policy helped but did not solve the increasingly outdated methods
- Soviet government signed deals with West in order to gain access - agreements made with Fiat and Renault but impact rarely extended beyond the plant in which they were used

What percentage of Soviet resources did the military-industrial complex soak up?

at least 18%

How many people did the military-industrial complex employ?

30 million (out of working population of 150 million)

What did Brezhnev's foreign policy involve?

increasing intervention in the developing world - make expenditure on arms and defence necessary