The Soviet System: From Crisis to Collapse

By Alexander Dallin; Gail W. Lapidus | Go to book overview

PART 4
The Economy

The urgency of restoring economic dynamism was a central motivation in the inauguration of perestroika. In this light the failure to stem and reverse the continuing deterioration of the Soviet economy was a most dramatic failure. It is scarcely an exaggeration to say that, although in politics and foreign affairs the reformers could point to signal successes, in economic policy perestroika proved to be an unmitigated disaster.

Some of the difficulties of economic reform were intrinsic to the enormous task itself. The shift from a highly centralized command economy to a market system based on private property (or a mix of private, cooperative, and public enterprises) was a task for which there were neither models to copy nor theoretical guidelines to follow. But the Gorbachev leadership was by no means unequivocally committed to such a fundamental transition, and the intrinsic difficulties of economic reform were compounded by the low level of economic understanding in high places, by the confusion and hesitation of decisionmakers, and by resistance and opposition both within the establishment and in the population at large.

As far as the scope and sophistication of economic discourse are concerned, the Gorbachev years provided considerable evidence of learning. This was demonstrated by the shift of attention from the initial interest in "acceleration" to the later quest for "marketization" and finally to a focus on the issue of private property, especially of land. Growing exposure to Western economic theory and practice was supplemented by extensive consultation with foreign economic specialists. A series of personnel changes brought to the fore economists with greater professional expertise who were charged with elaborating programs of economic reform. At the same time, the adoption and execution of these programs was seriously distorted and blocked by officials at various levels and agencies on ideological, economic, and technical grounds or as a means of protecting their turf. In particular, the central ministries, which would have lost their functions and power as a result of decontrol and decentralization, and the sizable and influential military-industrial sector vocally and tacitly obstructed reforms.

Faulty governmental policies also contributed to counterproductive patterns of economic behavior across the country. The breakdown of work discipline, itself a product of the absence of effective incentives, impeded both production and distribution and exacerbated the alienation of the population. Mounting inflation and the declining value of the ruble resulted from the government's increasing resort to deficit spending. Some of Gorbachev's policies inadvertently strengthened regionalism and

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