Attempts at Economic Reform

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Economic Reforms Between 1985 and 1990

Alongside long-term factors, Gorbachev’s failed economic reforms accelerated the fall of the USSR in the short term.

Gorbachev's phases of reform

Gorbachev's reforms came in three phases:
- Rationalisation: Gorbachev tried to make improvements to the existing state-controlled command economy.
- Reform: Gorbachev tried to introduce some free market measures into the existing economic structure. He wanted a hybrid of socialism and capitalism.
- Transformation: Gorbachev abandoned the state-controlled command economy entirely.

Rationalisation 1985-1986

Uskorenie (acceleration) meant a programme of investment and modernisation.
- It failed because borrowing money from Western governments led to a huge rise in the national debt.
- This led to inflation.
- Investment in energy did not have the desired effect.
Andropov’s anti-alcohol campaign continued.
- But as the state cut alcohol production, people began buying alcohol illegally.
- Alcohol revenues fell by 67 million roubles, and as such, the burden of the alcohol ban became too great.

Reform 1986-1990

November 1986: Law on Individual Economic Activity - it became legal to take on side jobs in the ‘second’ economy not controlled by the state.
June 1987: Law on State Enterprises - power was distributed from central government administration to factory managers. Prices were now set at the local level.
May 1988: Law on Co-Operatives - it became legal to set up large co-operatives. In practice, these were private corporations.

Transformation

Market reforms led to economic chaos. They fell through the gap between a socialist planned economy and a true free market alternative.
- Shortages of essential goods became more and more severe.
- Distribution of goods such as grain became ever more tricky.
GDP fell 4% from 1986-90. This led to a drop in approval ratings among politicians. Many were enriching themselves through buying privatised companies.

500 Day Programme

Gorbachev and Yeltsin's programme in 1990 was designed to transition the economy rapidly to a market model
Gorbachev ended up turning away from the programme after criticism from hard-line Communists.
- January 1991: Supreme Soviet introduced private property.
- Further reforms allowed ownership of stocks and shares.
- The reforms continued to fail. Production of oil fell 9%, while steel production fell 12%.
- The government was effectively bankrupt by 1991.

Historical Assessments of Gorbachev and his Reforms

Historians disagree over the role Gorbachev played in bringing down the Soviet Union. It is clear that his economic reforms snowballed out of his control.

Spinner's view of the USSR's economic weakness

‘Most symptoms of the crisis [of the Soviet Union] and the ultimate breakdown of the system can, in fact, be attributed to the impact of economic failure. Whereas economic modernisation was the motor of success in the earlier decades of the Soviet Union, the economy became the weakest link of the Soviet system.'

McCauley's view of the USSR's economic weakness

‘The collapse was the result of unintended consequences of government policies. The economy played a key role here. In an attempt to stimulate a slowing economy, the leadership adopted policies which fatally weakened the political and ideological pillars which sustained the system. This brought down the whole edifice...The conclusion is that poor leadership provoked political and economic collapse.’

Historical views on the impact of Gorbachev's reforms

Some have said that the policies failed because they did not fit with the existing institutions and approaches.
Gorbachev was constantly modifying his approach, so his policies had no time to mature.
Others have suggested that the system was too weak anyway for Gorbachev’s policies to succeed.

Historical views on Gorbachev's role in the collapse of the USSR

Some say the economy would have collapsed regardless of Gorbachev’s interventions. His attempts may have simply hastened the process.
Others argue that Gorbachev’s economic reforms could have worked. The mistake he made was that he attempted both economic and political reform at the same time. In doing so, he allowed citizens to protest when the economy failed. This led to the fall of the regime.

Oliver's view of Gorbachev's leadership

‘While the Soviet economic model suffered from inherent flaws, these were not the fundamental cause of collapse...By the early 1980s, woefully bad economic signs forced the Soviet leadership to embrace radical policies. Under Gorbachev’s over-confident leadership, the introduction of a heady mixture of political and economic reforms fatally undermined the Soviet system and ensured its ultimate collapse.’

McCauley's view of Gorbachev's leadership

'China and Vietnam have demonstrated that it is possible to move from a command to a market economy without undermining the power of the Communist Party. Hence the reasons for the failure of economic reform are political. Gorbachev removed the ideological and political pillars on which the Soviet Union was built.’

1Communist Government in the USSR, 1917-85

1.1Establishing Communist Party Control, 1917-24

1.1.1The Creation of a One-Party State

1.1.2Government under Lenin

1.1.3Centralisation of Power

1.1.4End of Topic Test - Establishing Control

1.1.5A-A* (AO3/4) - Establishing Control

1.2Stalin in Power, 1928-53

1.2.1The Elimination of Opponents

1.2.2The Purges of the 1930s

1.2.3End of Topic Test - The Elimination of Opponents

1.2.4Stalin's Power Over the Communist Party

1.2.5Stalin's Power During & After the Communist Party

1.2.6End of Topic Test - Power Over the Communist Party

1.2.7A-A* (AO3/4) - Stalin in Power

1.3Government, 1953-85

1.3.1Changes in Leaders' Control of the State

1.3.2Khrushchev's Attempts to Reform Government

1.3.3End of Topic Test - Government 1953-85

1.3.4Stability & Stagnation, 1964-85

1.3.5End of Topic Test - Stability & Stagnation

1.3.6A-A* (AO3/4) - Government 1953 - 85

2Industrial & Agricultural Changes

2.1Towards a Command Economy

2.1.1Nationalisation of Industry, Communism & the NEP

2.1.2End of Topic Test - Towards a Command Economy

2.2Industry & Agriculture in the Stalin Era

2.2.1Five Year Plans & Industrial Change

2.2.2Five Year Plans & Industrial Change 2

2.2.3End of Topic Test - Five Year Plans

2.2.4Agricultural Collectivisation & its Impact

2.2.5Recovery from War after 1945

2.2.6End of Topic Test - Collectivisation & Recovery

2.3Changes in Industry & Agriculture, 1953-85

2.3.1Light Industry, Chemicals & Consumer Goods

2.3.2Investment in Agriculture & Virgin Lands

2.3.3Attempts at Reform after 1964

2.3.4End of Topic Test - Industry & Agriculture

2.3.5A-A* (AO3/4) - Industry & Agriculture

3Control of the People, 1917-85

3.1Media, Propaganda & Religion

3.1.1State Control of Mass Media & Propaganda

3.1.2Attacks on Religious Beliefs & Practices

3.1.3Attacks on Religious Beliefs & Practices 2

3.1.4End of Topic Test - Media, Propaganda & Religion

3.1.5Cults: Stalin, Khrushchev, Brezhnev

3.1.6A-A*/ - Media, Propaganda & Religion

3.2The Secret Police

3.2.1Attacks on Opponents of the Government

3.2.2The Roles of Yagoda, Yezhov & Beria

3.2.3Andropov & Late Opposition to Soviet Rule

3.2.4End of Topic Test - Secret Police

3.3The State & Cultural Change

3.3.1Proletkult, Avant-Garde & Socialist Realism

3.3.2Nonconformity from the 1950s

3.3.3End of Topic Test - State & Cultural Change

3.3.4A-A* (AO3/4) - Control of the People

4Social Developments, 1917-35

4.1Social Security

4.1.1Full Employment Benefits

4.1.2Housing & Social Benefits

4.1.3Khrushchev, Brezhnev & Stable Society

4.1.4End of Topic Test - Social Security

4.2Women & Family

4.2.1Changing Status of Different Groups

4.2.2Changing Attitudes to Family

4.2.3Changing Attitudes to Family 2

4.2.4End of Topic Test - Women & Family

4.3Education & Young People

4.3.1Growth of Primary, Secondary & Higher Education

4.3.2Reduction of Illiteracy

4.3.3State Control of the Curriculum

4.3.4End of Topic Test - Education & Young People

4.3.5A-A* (AO3/4) - Social Developments

5Historical Interpretations

5.1What Explains the Fall of the USSR, 1985-91?

5.1.1Economic Weakness

5.1.2Attempts at Economic Reform

5.1.3Failure To Reform The Communist Party & Soviet Gov

5.1.4Impact of Reforms

5.1.5End of Topic Test - Economic Reform

5.1.6Impact of the Nationalist Resurgence

5.1.7Impact of the Nationalist Resurgence 2

5.1.8End of the USSR

5.1.9Gorbachev & Yeltsin's Responsibility

5.1.10End of Topic Test - Nationalist Resurgence

5.1.11A-A* (AO3/4) - Explaining the Fall of the USSR

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