Soviet Union in 1980’s :
economics – no form of investment, all I must come from state, all the industries were state owned, high unemployment, people are living dependant on the welfare of the state, no incentive to work harder, adsentees at work were high, productivity is low. STAGNATION in the economy, low 0 to max 1% growth. Severe lack of consumer goods.
Politics – in moral rot. The morale of the beaurecrats were low. Beaucracy was large, inefficient. This system demoralize the people even further. Year in year out, major inefficient LARGE beaucracy. They were also immune under the communism system. The iron rice bowl concept, they didn’t have to work based on merit, paid regardless. Those who were in power, were open to bribery, no trust from the public. Beaucracy vs the people.
- when Gorbachov came into power, he inherited this situation.
* this prompted Gorbachov to bring change/reforms. 1) Was this change motivated by the internal problems within SU? 2) Reagenomics ( military and foreign policies of Reagen)
* Ronald Reagan was anti communist. SDI – increase the military expansion 4 times fold. Left SU to decide wether to expand in accordance but at what rate? Using the entire GDP to expand military for the SU would mean horrible consequences for the SU already bad economy.
* What prompted Gorbachov? Partially because of both. But what caused SU to collapse? Internal problems outweigh Reagans hardline.
Reforms brought about by Gorbachev ( aimed at strengthening, rejuvenating socialism, believed it could be adapted, intended to solved the domestic problem
* because of the problems, he introduced NTP ( New Thinking Policy)
* he believed in socialism and that it could improve the people and condition the SU.
* He aimed to make communism a more conventional, revisit communism in a different way. He felt that communism could be adapted to improve SU condition.
* It was based on good intentions. However, the reforms did not have the desired outcome, resulted in more problem.
- freedom of media, allowing freedom of speech. Releasing political prisoners, allow people to voice their opinion and demands that they had kept for so long, encouraged criticism of leaders and govt ,anti alcohol program( raise price of vodka, drinking age to 21, hours of alcohol sale to reduced )
2) Intended outcome
-non alcohol program was intended to discourage workers from drinking and thus improve productivity and increase national output
- non alcohol program- people started to revolt, lining up to buy vodka instead of going to work, fighting with officials, campaign was very unpopular, led to the reexamination of SU history, truth of Stalin and atrocities came to light leading to the discrediting of communism, split within the communist party.
PERESTROIKA ( Economic and Political Reform)
* merit based system, he lifted the set price to demand supply,
2) Intended outcome
* more consumer goods, more goods to export, higher productivity
-sky rocketing inflation, country reduced to a mafia state
IMPACT OF GLASNOT AND PERESTROIKA ON SOVIET UNION
1) ever continuing decline eg : inflation was 2000%, rocketing at such a rate that the ruble were worthless, many people lost their savings because the rubles had no value. The SUCP no control, the gov is no longer control. The oligarchs controlled the economy. They had the entire countries economy in their hands black marketing, smuggling most common activity. Most things you could only buy underground.
2) Productivity continues to decline. In trying to raise productivity, was to raise the prices of vodka etc! but instead it backfired. Tremendous shortage of vodka. Esp. lines of alcohol queues grew longer
3) govt deficit spending- monetary policy. In order to continue economic reform, they got