Changes in the Soviet Economy

Comrades,

I'm doing a paper on "the transition from a socialist planned economy to a capitalist market economy in the USSR".

There's quite a lot of information on this subject, both from sources inside the USSR and outside it. I found that a lot of information is being shrouded in propaganda, and therefore I was hoping some of you economic experts could help me out with a couple of questions. I've made a Main Question and a couple of Sub questions:

Subject:

Transition of a Socialist (state-capitalist) centrally planned economy to a Capitalist market in the Union of Soviet Socialist Republics.

Main Question:

How does this effect the National Economy in the USSR?

Sub questions:

How did it affect the National Income in the USSR?

How did it affect balance of trade in the USSR?

How did it affect consumption in the USSR?

How did it affect the distribution of wealth in the USSR?

How did it affect government expenditure in the USSR?

Thank you very much in advance for helping me out.

If you're looking for the effects of Gorbachev's economic reforms on the planning apparatus, I might be of some help. I would like to clarify first though the perameters of your study. By the time the 500 Day Shatalin Plan was proposed in 1990 the centrally planned economy was heavily out of wack. This plan which was explicit in its aims to convert the USSR to a market economy was shot down by Gorbachev and the Supreme Soviet, in favour of a slower process of reform. Reform of the Russian economic system to a 'true' capitalist market economic system wasn't complete until 1995, when major state enterprises were finally sold off to Yeltsin's buddies. In other former SSRs the history of reform is much the same (i.e. slow).

http://en.wikipedia.org/wiki/500_Days

http://en.wikipedia.org/wiki/Privatization_in_Russia

Naturally I was going to bump into some problems with how I'm going to portray both different economies, like you said the planned economy was pretty much devastated and apparently the process of transition to a market economy took longer that I had thought. I think I will concentrate on the years 1985-1995, yet I do need to clarify that with Gorbachev coming to power things would majorly change. It would be great if you have some statistics from those years that show the results of the transition.

Quote:

Transition of a Socialist (state-capitalist) centrally planned economy to a Capitalist market in the Union of Soviet Socialist Republics.

The Soviet Union throughout its history was never State Capitalist. State Capitalism is where the state owns most of the property, but runs it for profit. China is an example of State Capitalism, not the USSR in any moment of its history.

Wouldn't that mean the USSR would be in stagnation if it made no profit?

Sorry, I didn't mean for this thread to turn into a discussion about whether the USSR was state-capitalist or not, I just added that to kind of reflect how I feel about the USSR.

Quote:

Sorry, I didn't mean for this thread to turn into a discussion about whether the USSR was state-capitalist or not, I just added that to kind of reflect how I feel about the USSR.

It's just that I don't like to see terms thrown around without meaning. Did it become stagnant and bureaucratic from 1955-1991? Yes. Was it State Capitalist? No.

EDIT: I'm sorry if I am sounding harsh, but as I said, State Capitalism had a particular meaning, and the USSR never fit that description.

^All right then, the USSR was in my opinion State Capitalist because it used a wage system, production was controlled from above (instead of democratically from below) and it appropriated surplus value (one of Marx' criticisms of a Capitalist society).

Surplus value would also be appropriated in a socialist economy, as Marx made clear in his Critique of the Gotha Programme. What matters is how that appropriated surplus value is distributed. Marx's criticism of the capitalist system was (among other things) that the surplus value is socially produced but privately appropriated and distributed. He regarded this as the central internal contradiction of the capitalist mode of production.

In short, the Soviet system did not produce a 'profit' (ie, privately appropriated surplus value), but it did produce surplus value. If it hadn't, no expansion of the forces of production would have been possible.

By the way, the Soviet economy could have been described as 'state capitalist' in the 1920s (and Lenin did so describe it at the time), but after the abolition of the NEP and its replacement with Stalin's Five Year Plans, it became state socialist, and remained so until its dissolution in 1991.

^So in the USSR the surplus value was socially appropriated and distributed? I'm not too sure about that.

Anyway, can anyone give me some statistics on the original questions please? Like I said, let's stop the debate about whether the USSR was state capitalist as this isn't quite relevant to my paper.

Quote:

^So in the USSR the surplus value was socially appropriated and distributed? I'm not too sure about that.

It was certainly not privately appropriated. The state was (in theory at least) a workers' state. If a workers' state appropriates the surplus value created by the working class and then distributes that surplus value, not as profits to private individuals, but by reinvesting it in society as a whole in the ostensible interests of the working class, then this cannot be described as 'state capitalism'. It is, in fact, state socialism. And the fact that production is organised from above rather than from below is what the 'state' part means in 'state socialism'.

Quote:

Anyway, can anyone give me some statistics on the original questions please?

Like I said, let's stop the debate about whether the USSR was state capitalist as this isn't quite relevant to my paper.

http://src-h.slav.hokudai.ac.jp/database/SESS.html
http://www.hsph.harvard.edu/pgda/seminars/.../Brainerd_PGDA1.29.07.ppt

->Far from complete but better than most free non-academic sources. It seems finding stats for 1990-1991 are more difficult. I haven't researched year by year data on the subject for over five years now. Plus I don't have access to an academic library's books or journal articles anymore.

You're going to run into problems trying to compare statistics which were calculated and measured according to different accounting methodologies. Soviet statistics were skewed by overreporting of output and the non-recording of the underground economy's contribution. Also, prices for goods and services were subsidized, meaning money had different uses and values than it does in a market economy. Also remember that Russia =/= USSR, so you're going to have to play with statistics post-1991 (perhaps by combining CIS statistics). The reform years (87-91) are perhaps the most susceptible to being ridiculous, due to the semi-planned semi-market mess created by the reforms, and the debate about changing the methodology by which statistics are calculated.

It wasn't so much capitalism as it was short-sightedness and negligence on the part of Soviet law makers and economists that led to the collapse of the Soviet economy. The Law on State Enterprise and the Law on Cooperatives completely screwed up the planning system, but at the same time a true market economy wasn't able to operate properly either.


I can explain to you why the reforms were detrimental to the health of the economy, with sources. TBH though, your insistance at being given statistics almost made me not want to reply. It is your school assignment after all, and you should be the one to determine the content and find the sources yourself.

soviet78 wrote:

TBH though, your insistance at being given statistics almost made me not want to reply. It is your school assignment after all, and you should be the one to determine the content and find the sources yourself.

So this is what I did, and my mark was 7.2/10 Although I probably would've gotten a higher mark if the teacher actually understood the subject...