A Journal for Western Man

 

An Overview of Soviet Economic Policies

G. Stolyarov II

Issue XCIX- May 12, 2007

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Principal Index

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Old Superstructure

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Old Master Index

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Contributors

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The Rational Business Journal

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Forum

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Yahoo! Group

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Gallery of Rational Art

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Online Store

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Henry Ford Award

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Johannes Gutenberg Award

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CMFF: Fight Death

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Eden against the Colossus

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A Rational Cosmology

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Links

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Mr. Stolyarov's Articles on Helium.com

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Mr. Stolyarov's Articles on Associated Content

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Mr. Stolyarov's Articles on GrasstopsUSA.com

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Submit/Contact

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Statement of Policy

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         The aim of this paper is to briefly describe the basic economic policies followed by the leadership of the Union of Soviet Socialist Republics (USSR) throughout its history. It is a history of centralized power, stifling of private entrepreneurial activity, and haphazard attempts to manage an economy that was far too large for any single individual or group of individuals to understand and direct.

            The Soviet five-year economic plans gave targets for the economy, but the actual economic blueprint was contained in the one-year plans. The Politburo would decide on the general economic objectives and then assign the task of designing specific plans to GOSPLAN, the state economic planning agency. The economic plans would then be sent to the ministries—each of which oversaw a particular industry. The ministries would attempt to implement the economic plans within their respective industries.

            The Soviets used materials balance planning, whereby GOSPLAN assigned to individual state-owned enterprises the resources it was thought the firms would need to satisfy their production targets. Firms would send requests for inputs to GOSPLAN, and GOSPLAN would decide on the quantity and nature of resources to allocate to each firm.

            Vladimir Lenin’s New Economic Policy attempted to reintroduce markets temporarily; Lenin saw this as “taking one step back to take two steps forward”.  But after Josef Stalin came to power in 1924, this policy was reversed. During Stalin’s collectivization of agriculture, the Soviet government sought to forcibly extract an agricultural surplus from peasants—especially in the Ukraine—in order to sell the surplus grain abroad and use the proceeds to fund industrialization. Economic planners such as Yevgeni Preobrazhensky (1886-1937) considered the peasants an “internal colony” that could be ruthlessly exploited for the benefit of the socialist state.

            During the 1980s, Soviet economic controls began to relax. Gorbachev’s Perestroika or “restructuring” attempted to save the obviously troubled Soviet economy by giving state enterprises more autonomy and allowing a limited degree of private enterprise. But private firms were heavily taxed and regulated—therefore not contributing substantially to economic recovery, while the absence of real markets and market prices simply gave state firms a freer hand in enriching themselves by taking advantage of consumers. Perestroika accelerated the USSR’s economic decline because it failed to introduce a genuine market system and only removed many of the earlier checks in place on state-owned enterprises. Without a true free market in place, only economic chaos could ensure from Gorbachev’s attempts at reform, and the Soviet Union was headed for a breakdown it could not escape.

G. Stolyarov II is a science fiction novelist, independent philosophical essayist, poet, amateur mathematician, composer, contributor to Enter Stage Right, Le Quebecois Libre,  Rebirth of Reason, and the Ludwig von Mises Institute, Senior Writer for The Liberal Institute, weekly columnist for GrasstopsUSA.com, and Editor-in-Chief of The Rational Argumentator, a magazine championing the principles of reason, rights, and progress. Mr. Stolyarov also publishes his articles on Helium.com and Associated Content to assist the spread of rational ideas. His newest science fiction novel is Eden against the Colossus. His latest non-fiction treatise is A Rational Cosmology. Mr. Stolyarov can be contacted at gennadystolyarovii@yahoo.com.

This TRA feature has been edited in accordance with TRA’s Statement of Policy.

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Learn about Mr. Stolyarov's novel, Eden against the Colossus, here.

Read Mr. Stolyarov's new comprehensive treatise, A Rational Cosmology, explicating such terms as the universe, matter, space, time, sound, light, life, consciousness, and volition, at http://www.geocities.com/rational_argumentator/rc.html.