Economy Of The Soviet Union
The economy of the Union of Soviet Socialist Republics (USSR) was based on a system of state ownership of the means of production, collective farming, industrial manufacturing and centralized administrative planning. The economy was characterised by state control of investment, public ownership of industrial assets, and during the last 20 years of its existence, pervasive corruption and socioeconomic stagnation.
After Mikhail Gorbachev came to power, continuing economic liberalisation moved the economy towards a market-oriented socialist economy. All of these factors contributed to the final dissolution of the Soviet Union in 1991. The stagnation that would consume the last years of the Soviet Union was caused by poor governance under Leonid Brezhnev and inefficiencies within the planned economy. When the stagnation began is a matter of debate, but is normally placed either in the 1960s or early 1970s.
Beginning in 1928, the entire course of the economy was guided by a series of Five-Year Plans. By the 1950s, the Soviet Union had, during the preceding few decades, evolved from a mainly agrarian society into a major industrial power. Its transformative capacity—what the United States National Security Council described as a "proven ability to carry backward countries speedily through the crisis of modernization and industrialization"—meant communism consistently appealed to the intellectuals of developing countries in Asia. Impressive growth rates during the first three Five-Year Plans (1928–40) are particularly notable given that this period is nearly congruent with the Great Depression. Nevertheless, the impoverished base upon which the Five-Year Plans sought to build meant that, at the commencement of Operation Barbarossa, the country was still poor. While legitimate strictly in terms of growth and industrialisation, the death toll attributable to Stalinist economic development has been estimated at 10 million, much of which comprises famine victims.
The complex demands of the modern economy and inflexible administration overwhelmed and constrained the central planners. Corruption and data fiddling became common practice among the bureaucracy by reporting fulfilled targets and quotas, thus entrenching the crisis. Nonetheless, from the Stalin-era to the early Brezhnev-era, the Soviet economy grew as fast as the Japanese economy and significantly faster than that of the United States.
The USSR's relatively small service sector accounted for just under 60% of the country's GDP in 1990, while the industrial and agricultural sectors contributed 21.9% and 20% respectively in 1991. Agriculture was the predominant occupation in the USSR before the massive industrialization under Joseph Stalin. The service sector was of low importance in the USSR, with the majority of the labor force employed in the industrial sector. The labor force totaled 152.3 million people. Major industrial products include petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, lumber, mining, and defense industry.
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“Wise men read very sharply all your private history in your look and gait and behavior. The whole economy of nature is bent on expression. The tell-tale body is all tongues. Men are like Geneva watches with crystal faces which expose the whole movement.”
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—Anthony, Sir Eden (18971977)
“Is there life on Mars? No, not there either.”
—Russian saying popular in the Soviet period, trans. by Vladimir Ivanovich Shlyakov (1993)
“The methods by which a trade union can alone act, are necessarily destructive; its organization is necessarily tyrannical.”
—Henry George (18391897)