5.1.1

Economic Weakness

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Economic Weaknesses in the USSR by 1985

Historians have analysed long-term economic weaknesses of the USSR and found that they played a role in bringing down the regime.

Illustrative background for Centralised economyIllustrative background for Centralised economy ?? "content

Centralised economy

  • The centralisation of the economy made it inefficient and this contributed to its weakness.
    • It was impossible to run the economy across the whole USSR from Moscow.
    • Bureaucrats sometimes failed to coordinate fertiliser shipments and they arrived at farms at the wrong time.
    • Incorrect steel and oil products were sent to factories.
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Lack of incentives

  • There were few incentives within the communist economy for working hard or innovating. This led to lower productivity levels.
  • Industrial targets were always based on quantity, not quality. Goods produced were often useless.
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US rivals

  • American farms were six times more productive than Soviet farms but required far fewer workers.
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Undeveloped aspects of the economy

  • Transport links remained undeveloped throughout the period.
  • Storage facilities remained undeveloped, so a lot of product was wasted.

Military Expenditure by 1985

Military expenditure was a significant portion of the USSR's GNP. This took a toll on the stagnant economy.

Illustrative background for Expenditure Between 1965 and 1985Illustrative background for Expenditure Between 1965 and 1985 ?? "content

Expenditure Between 1965 and 1985

  • Soviet military spending was incredibly high.
  • During the two decades after 1965, spending on defence went up from 12-17%.
  • In this phase of the Cold War, the US spent around 6% on defence.
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Military expenditure: an economic burden?

  • By 1985, there was no growth any more in the Soviet economy. Inefficiencies and long-term problems were undermining the USSR.

Jump to other topics

1Communist Government in the USSR, 1917-85

2Industrial & Agricultural Changes

3Control of the People, 1917-85

4Social Developments, 1917-35

5Historical Interpretations

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