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Did Socialist Regimes Collapse Because Of Economic Problems Politics Essay

After the bloodstained Russian Revolution of 1917, the Soviet Union (1922-1991) became a giant, politically and economically. World War II (1939-46) then came to make it a superpower in the bipolar world, despite the fact that battles were held in its territory and disaster in its land was massive. During the Cold War (1945–1991) era, the Soviet Union had such an economic and military power that it was equal to the Western World and the America. In the 1980s, however, important weaknesses in the communist economy of the Soviet Union were evident and this situation was exploited by capitalist countries, such as America and the United Kingdom. The Soviet economy was overburdened by the arms race and the culture of war. The division of the world into capitalist and communist blocs caused deterioration in the loopholes of the economy.

In 1955 the Warsaw Pact, which was a counterpart of North Atlantic Treaty Organisation (NATO-1949), was signed by the communist states. The foundations of the Soviet Union were starting to shake by economic policies and the Cold War. The budgetary deficit of 1988 was 120 billion Rubles and that means the one fourth of the entire budged of the government. The atomic power plant explosion of Chernobyl (1986) and the 10 year war in Afghanistan (1979-89) proved fatal for Union of Soviet Socialist Republic’s (USSR) economy. The economy of the USSR became so weak after the defeat of the Afghan War, that it was about to collapse, leading a powerful empire to its end (1991).

The USSR was founded upon the ideology of communism; however it was not theoretically prepared for war. Karl Marx, Friederick Engel and even Vladimir Lenin, warned that if war came, it would have enormously wicked impacts on the economy of the Soviet bloc; “…the direct equivalent of a nation throwing a part of its capital into water.” [1] (Karl Marx), “...militarism dominates and is swallowing Europe. But this militarism also bears within itself the seed of its own destruction. Competition among the individual states forces them, on the one hand, to spend more money each year on the army and navy, artillery, etc., thus more and more hastening their financial collapse…” [2] (Friedrich Engel), “…the tax in kind is one of the forms of transition from that peculiar war communism which was forced on us by extreme want, ruin and war to regular socialist exchange of products.” [3] (Vladimir Lenin) Despite what these three men had said, the Soviets spent huge amounts on research and development of military technology and followed a war-monger policy that was not beneficial for them.

Lloyd Dhumas’ book “The Overburdened Economy”, published in 1986, clearly points out how fragile the economic system of the Soviet Union is. He supports that military productivity is worse than unproductively. There was massive diversion of resources in military production, thus bare resources were left for the people and that made the social health burden. Military sector kept swallowing social sector due to the economic policies of the Soviet Union that were extremely imbalanced. [4] 

An article by Otto Latsis, a soviet economist, published in the World Marxist Review characterised the Soviet war-time model a “miracle”. [5] The picture of the communist economic system, which was facing weaknesses, worsened and obviously this was facilitated by the political scenario of that time. According to Otto Latsis, “…the gloomy background of the worsening market situation… has a depressing effect on people.” [6] 

Although the USSR invested heavily in technology, military equipment was the centre of attention and there was a massive spending for the production of military hardware. Consequently, limited resources were left for the welfare of the nation. According to Ednan Agaev, 85-90% of Moscow’s scientific researchers were engaged in the military sector. [7] 

As correctly stated by Allama Muhammad Iqbal, “the destiny of a nation is in the hands of the public and every individual is the star of its fate.” [8] Without the public’s active involvement, no development of any country can occur. Apparently, the USSR totally ignored this sector. While most of the overall industrial assets were spent on the Soviet defense industry, education and health sector were left with almost nothing. Thus, advancement in military technology brought continuous corruption on the social sector.

The USSR was trying to build the economies of its member states at the cost of its own economy. It depleted its own resources and emasculated the national economy. A report by RAND Corporation (Research and Development) shows that the USSR was losing at a rate of $30-50 billion per year. [9] The communist republics kept sucking their own resources. The communist bloc was perpetually drifting towards a strong sense of nationalism; the very base of the two world wars. Realising the nationalism, the republics of the Soviet bloc felt the need to keep distance from that system. Brezhnev doctrine, signed on the 26 September 1968 by all the member states of the Soviet bloc, allowed the Red forces to invade any member state to keep the union united. [10] For example, the rebellions in Hungary in 1956 and Czechoslovakia in 1968 were crushed by military invasion of the Red Army. Thus, nationalism within the communist bloc and opposition by capitalist states did not allow for communism and its economy to flourish. It is worth mentioning here that since the fall of the USSR in 1991, all 15 former soviet republics repealed the communist economy model.

Trust is the most vital foundation of the human society. On the contrary, the communist system of governance was characterised by mistrust and distrust. Fear dominated among the party members, as party officials were often killed. Any opposition voice was hushed by KGB (Komitet Gosudarstvennoy Bezopasnosti or Committee for State Security) and its members. Secrecy was adopted by the USSR in military, political and economic fields and the economy was suffocating.

Karl Marx said that there should be “…a society in which each person should contribute according to their ability and receive according to their need.” [11] Communism has an inherent weakness; according to Dr Tarvin Hussain Bhatti “it denies the very fundamental concept of human nature that derives satisfaction from effort and reward and as the USSR economy was based on state ownership of property” [12] industries could not expand, as they belonged to the state, and this proved to be fatal for the union. Also, unemployment rate was high and unemployed people that did not contribute in production, also consumed the resources of the state, acting as parasites. Moreover, in the USSR, the government had the monopoly without having any other competition and thus, the products were products of very low quality. The monopolistic nature of economy that the USSR followed proved lethal for it because the globalised world does not support a monopolistic economy. Instead, a competitive environment is required to boost the economy.

The USSR’s economy was characterised by many crests and troughs throughout its evolution. Oil, manganese, iron, coal, gas, gold, and other mineral resources were mobilised to help the Union and its economic strength. The famine of 1932-33, due to the economic collapse of 1928, had effects on the Soviet Union’s economy and in 1961 the Ruble was at par with a Pound Sterling. In 1971 Soviet Union’s economy was in its zenith. “The Soviet economy flourished so rapidly that it became one of the top producers of capital goods, heavy industrial manufactured goods and armaments. However, the managers at the head did not pay proper attention in production of consumer goods and services.” [13] 

During Joseph Vissarionovich Djugashvili’s (Stalin’s) period of rule, from 1929 to 1953, a central governing body that controlled the economy was developed. When the stock markets of the West faced the fall, Stalin’s policies faced an economic boom. From then on, there was a steadily economic sinking. Krushev in 1957, the Sovnarkhoz reforms, the Brezhnez-Kosygin reforms in 1965, industrial reorganisation in 1973, the 1973 Decree, were all attempts to save the USSR’s economy that simply failed. [14] 

Mikhail Gorbachev and his advisors, in the 1980s, attempted to reform the economy in a way that could at least prevent the communist empire’s economy total collapse. Before, Gorbachev’s rise to the peak of power, chaos occurred. There was massive unemployment and prisoners were forced to perform unpaid work.

Agriculture is perhaps the most vital aspect of an economy, which is necessary to feed the population. In spite of the huge workforce, the extensive agricultural machinery and the vast land tracts, agricultural production was insufficient to feed the whole population. The unfavourable climatic conditions for crop production and the low productivity from workers were additional problems to the agriculture sector, which was heading more and more backwards. The insufficient infrastructure and inadequate transport facilities did not enable the efficient distribution of products in the markets. Although there were farms, their production was extremely low. The agriculture sector was neglected by the government, which apparently did not care about or underestimated this factor.

According to what has been stated above, the three major issues that the USSR decided to invest on were arms race, massive war technology production and manufacture of capital goods. [15] Although the capitalist countries of the era of Cold War also invested money on the production of weapons, they had an open market system that kept flourishing. Lenin wrote in his article, “Armaments and Capitalism”: “…we find that admirals and prominent statesmen of both parties, Conservative and Liberal, are shareholders and directors of shipyards, and of gunpowder, dynamite, ordnance and other factories. A shower of gold is pouring straight into the pockets of bourgeois politicians, who have got together in an exclusive international gang engaged in instigating an armaments race among the peoples and fleecing these trustful, stupid, dull and submissive peoples like sheep.” [16] 

In conclusion, the USSR, in order to keep a military balance with the powerful America, spent an enormous amount of money for military equipment and arms race; this policy was followed despite the fact that its economy could not afford it. At the beginning, the progress of the Soviet Union was extremely rapid but due to weaknesses in its economy it could not afford keeping this economical system. The Soviet Union invested enormous funds on military technology and in this way only limited resources were available for the social sectors. Moreover, the regime’s policy to crush opposition left no room for any proper analysis of issues and flaws in the field of economy. They seemed to be low priority issues for the regime. The ideological clash with America and its allies was quite obvious; thus little doubt is left that the western allies, under America, did not seem to care if the USSR was going down or not and in fact made no effort to help the situation. The regime’s ambition to access the waters of the Arabian Sea pushed the Soviet Union towards the Afghan war, which proved fatal for it, since USSR was defeated. The Soviet bloc’s economy collapsed because of its own faults. The economic fall in the USSR had as a result, in 1991, the total collapse of the Union. The Capitalist countries of the Cold War era very successfully bragged that they would fight until the Soviet Union would fall into its grave. So it happened, the Soviet economy collapsed, taking in the grave the whole Soviet bloc.

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