USSR

1
USSR

• Command Economy
• and central planning

2
Why failure?

• Role of soviets
• Open market economy trends
• Demographic diversity
• October 1917 revolution implementation of
  Marxist Leninist principles
• Federation December 1922

3
Economy prior to 1917

• Trade, agriculture, military industrialisation
• Dual economy Peasant Emancipation Act 1861.
  Mir?
• Industrialisation inward-looking . Slow,
  Cultural resistance. Traditionalism v
  occidentalism
• NEP 1921

4
USSR Command economy

• Market forces rejected
• CP divided pluralism of economic systems
• Stalinism identify characteristics
• Debate geneticists v teleologists
• Super industrialisation 5 Year plans
• Study the nature of central planning

5
Implementation of Central Planning

• Are the market and planning allocative
  substitutes?
• Annual medium term plans 5 y / 15 y. Annual
  plans individual enterprises.
• Large productive units - 10 000 workers
• Informal bargaining lower quotas ratchet
  -effect. Storming. L idleness
• Role of prices control mechanism resource
  allocation.
• Gini-coefficient fixed low P? Prices sticky

6
Agriculture

• Agricultural reforms what happened to food
  security? Stalin collectivisation.
• Kolkhoz co-operative
• Sovkhoz state.
• Household plots private legal entity of
  shadow economy.
• Black market socialized and personal gain -
  corruption

7
Trade Isolation

• Capitalism hostile imperialism isolation of
  autarkic socialist state.
• State control / monopoly planners determine Z
  and X
• Bilateral trade Comecon dependency on USSR
  Collective isolation
• Inefficiencies and non-competitiveness reduced
  intra-bloc trade.
• Oil price bubble - Z from west.

8
Reforms

• Protectionism and paternalism reform/ism
  disallowed. Industry-military complex threatened
  by resource scarcity quality undermined -
  planning inefficient.
• Khruchev coexistence 1953 agricultural reforms.
  Regional planning decentralisation councils. CP
  obstacle.
• Gorbachev perestroika and glasnost- stimulated
  individualism and secessionism.

9
Lagacy

• Underlying principles
• Failed reforms explain
• Reforms Shock therapy, voucher privatisation.
  Municipal asset sale.
• Rapid privatisation end 1995 unequal
  distribution amongst elite. Corporate governance?
  Nomenklatura survived.