5.1.4. The Communist USSR (1928 – 1988): Rapid Growth Followed by Stagnation
Stalin reversed the NEP in 1928 and central state planning and the forced collectivization of agriculture followed, “From the mid 1930s to Stalin’s death in 1953, the policies of forced collectivization, rapid industrialization, and centralized planning through a series of five-year plans held complete sway” (Keeran & Kenny 2010, chap. 2, para. 16). Reinforcing his position, in 1929 he removed his other possible rival, Bukharin, from the Politburo when the latter disagreed with the forced collectivization policy; Stalin had become a de facto communist Tsar. His two aims were to forcibly collectivize the peasantry to remove them as a threat to the revolution and to rapidly industrialize in order to meet the external threats. With respect to the latter, nothing was allowed to stand in the way of removing the nation’s backwardness:
To slacken the tempo would be to fall behind. And the backward get beaten. We don’t want to be beaten … The history of old Russia consisted, among other things, in her being ceaselessly beaten for her backwardness. She was beaten by the Mongol khans. She was beaten by the Turkish beys. She was beaten by the Swedish feudal rulers … by the Polish-Lithuanian lords. She was beaten by the Anglo-French capitalists … [and] by the Japanese barons. Everyone gave her a beating for her backwardness … They beat her because it was profitable and could be done with impunity … We have fallen behind the advanced countries by 50 to 100 years. We must close the gap in ten years. Either we do or we will be crushed. (Stalin, quoted by Carley 2014, p. 352)
The drive to industrialize was at first aided by good weather in 1930, concessions made to the peasants, and the Great Depression in the West; the latter made those nations much more open to their corporations accepting Soviet contracts.
As other customers for large capital orders became scarce, Stalin shopped the great capitalist department store. Starting with the American companies Freyn Engineering and Arthur McKee … to import the new American wide-strip steel mills and heavy blooming mills with which to build brand new integrated steel plants … with the Ford Motor Company to build an integrated mass-production facility … Caterpillar was engaged to re-equip facilities … to mass-produce tractors and harvesters … DuPont and Nitrogen Engineering to manufacture chemicals, nitric acid, and synthetic nitrogen, and Westvaco for chlorine … ball-bearings technology from Sweden and Italy, advanced plastics and aircraft from France, turbines and electrical technology from Britain. Virtually every contract would contain one turnkey installation – an entire plant from scratch to operations. (Kotkin 2017, p. 31-32)
The West was greatly aiding the development of a Soviet Union that it had only recently tried to strangle at birth, paralleling its later role with post-Mao China; “Tsarist Russia had produced almost no machine tools in 1914, the Soviet Union, in 1932, produced 20,000” (Kotkin 2017, p. 71). The good luck would not continue. As collectivization and forced grain procurements were intensified, with one of the former’s aims the explicit destruction of the kulaks, drought visited the main growing areas. The result was widespread famine, “in 1931, a cold spring followed by a summer drought – a fatal combination – struck the Kazakh steppes, Siberia, the Urals, the Volga, and Ukraine” (Kotkin 2017, p. 75). At the same time the Great Depression created deflation in commodity prices, the exports of which were paying for the foreign technologies critical to Soviet industrialization. The pace of industrialization would have to be significantly slowed, or the peasants would have to be sacrificed; Stalin chose to sacrifice the peasants. During the years of 1932 and 1933 it has been estimated that anywhere between 4.5 and 10 million died from the direct and indirect effects of the famine, as Stalin refused to redirect resources to alleviate the suffering. The scale of the required repression was extensive, “Collectivization involved the arrest, internal deportation, or incarceration of 4 to 5 million peasants,” (Kotkin 2017, p. 131).
The higher death figures tend to be utilized by those that argue for a Holodomor (death by hunger), a purposefully produced famine to quell Ukrainian nationalism. Such claims are open to substantial academic debate, especially whether or not a conscious genocidal decision-making was present, and the higher death figures have not been confirmed by more recent academic access to Soviet-era records (Vallin, Meslé, Adamets & Pyrozhkov 2002; Himka 2008). The leading scholar of famine, Cormac O’Grada, states, with respect to theories of an intentionally ordered famine directed at the Ukraine:
Recent specialist scholarship denies this, regarding the ‘years of hunger’ instead as the outcome of a political struggle between a ruthless regime, bent on industrialization at a breakneck speed, and an exploited and uncooperative peasantry. The recently released correspondence between Stalin and his right-hand man, Party Secretary Lazar Kaganovich, shows no sign of a plan to single out the Ukraine; to the contrary, on August 11, 1932, Stalin … confided to Kaganovich his conviction that ‘we should be unstinting in providing money’ to the Ukraine, if only for fear that it might be lost to Moscow. (O’Grada 2009, p. 236)
It must be remembered that the Russian Empire had repeatedly suffered famines, and a major famine had occurred from 1921 to 1923 a decade earlier that cost up to 5 million lives. The 1931-33 famine can be seen as the combination of a civil war between the kulaks (who intentionally destroyed much of their livestock and implements) and the Soviet state (and the poorer peasants who resented the kulaks), the need for agricultural products to pay for the rapid industrialization that allowed the Soviet Union to defeat the Nazi regime, and climatic drought conditions. Western scholarship during the Cold War, and more recently, has been greatly coloured by ideology, with the myth of the Holodomor central to Ukrainian nationalist discourse. Western accounts written during the Cold War, and what now appears to be a Second Cold War (with a hot war in Ukraine) must be treated with a great deal of skepticism, especially when written by those directly involved in Western government and elite propaganda activities (e.g. Robert Conquest with the British Information Research Department and Ann Applebaum with the US NED, the CFR and many others). As the historian Getty (1987) commented in his review of Robert Conquest’s 1986 book on the subject; comments which are as applicable today as they were when they were written:
We might profitably wonder about the resurgence of the intentional famine story just now. It seems to be part of a campaign by Ukrainian nationalists to promote the idea of a ‘terror-famine’ in the West .,, The not-so-hidden political message behind the campaign coincides with long-standing political agendas of émigré groups: given that the Soviets could murder so many of their own people, might they not be willing to launch a destructive nuclear war in order to spread their evil doctrine? Because the Soviets are like the Nazis, we must avoid appeasement, maintain our vigilance … Is it then understandable that he should omit any mention of the Ukrainian nationalist anti-Communists who pulled the triggers at the Babi Yar death-pits and elsewhere in co-operation with the SS, and the substantial numbers who chose to follow the Nazis out of the USSR at the end of the war? … the case for a purposeful famine is weakly supported by the evidence and relies on a very strained interpretation of it.
Soviet propaganda was also effectively mixed with repression to facilitate an extreme level of work intensification and exploitation, “Money was spent like water, men froze, hungered and suffered but the construction went on with a disregard for individuals and a mass heroism seldom paralleled in history” (Scott, quoted in Parenti 1997, p. 67). There was also much genuine enthusiasm, as Getty and Naumov (2010, pp. 29-30) note:
The period of the First Five Year Plan (1928-32) was one of exuberance and excitement. Millions of workers went to school and moved into management. Millions of young peasants escaped the villages and flocked to new lives in construction. Young people volunteered in large numbers to work for the common effort, to help with collectivization, and to improve their work qualifications … The first Five Year Plan was a great success. Production indexes in mining, steel and chemicals increased severalfold in four years. Factories and miners sprang up everywhere, and the country was proud of the new giant dams, plants and railroads whose construction contrasted so sharply with the industrial doldrums of the Great Depression in the West.
This was very much in contrast to the class war taking place between the Soviet state and the kulaks. It can be argued that Stalin made the right decision with respect to the raison d’etat, it was the forced industrialization that allowed the Soviet Union to withstand the later Nazi onslaught. There is no doubt of the Nazi plans for the Soviet Union west of the Urals, a repeat of the North American Amerindian genocide and land theft, with the Slavs treated by the Nazis as the Amerindians were treated by the expanding British colonies and the US nation that superseded them. Hitler wrote admiringly of the Amerindian genocide in Mein Kampf and saw it as a model for his eastern lebensraum. With a good fall harvest in 1933, and the impacts of the crash industrialization starting to be seen, the parallel collectivization and industrialization strategy could start to be seen as a success; especially when set against the depression within the capitalist realm. Unlike Mao in the early 1960s, Stalin had maintained his pre-eminence while fully collectivizing agriculture and building the nation’s industrial might, “Stalin forced into being a socialist modernity, presiding over the creation of a mass-production economy, a Soviet mass culture, an integrated society, and a mass politics, without private property” (Kotkin 2017, p. 296).
The autocracy of Stalin, as with the dictatorship of the Tsars, requires the analytical use of Mearsheimer’s first image, “within man”, in this case a single man; a man who “increasingly was alone. Not only had both of his wives died [the second one committing suicide], but now his closest friend [Kirov] was gone [murdered]”, his relations with his children had become strained, and “newer associates, Andreyev, Yezhov, and Zhdanov, were minions, not social peers, and he was not close to the unlettered Kaganovich or the stiff Molotov” (Kotkin 2017, p. 236). We must also understand that Stalin did not act as a dictator, but as the leader of a group which I will refer to as the Stalinists. The experience of the brutal three-year Civil War, a “life-and-death struggle against domestic and foreign enemies … nurtured … a kind of mentality that saw enemies and conspirators everywhere and allowed little in the way of compromise or toleration” (Getty & Naumov 2010, p. 22).; for all of the Bolshevik leadership. Added to this was the struggle for power after Lenin’s death, starting with the marginalization of Trotsky in 1924 by the combination of Bukharin, Zinoviev, Kamenev and Stalin. In 1925, Zinoviev and Kamenev had split off in opposition to the NEP, to be joined by a diminished Trotsky, but were defeated by Stalin and Bukharin in 1927. In a last-ditch effort, Trotsky had taken the internal disagreement onto the streets on the 1927 anniversary of the October Revolution. “This horrified the party majority because it threatened to take the inner-party struggle into the public eye” (Getty & Naumov 2010, p. 26), where it could be exploited by both internal and external enemies. “any attempt to carry politics outside the confines of the party was the one unpardonable sin” (Ibid.); Trotsky was exiled (and then deported) and Zinoviev and Kamenev stripped of their senior positions. Bukharin and Stalin were now in charge, and they seem to have worked together and even become relatively close friends. With Stalin turning against the NEP though, while Bukharin supported it, the joint leadership could not last and Bukharin and his main allies were sidelined by 1930; an outcome that was accepted by them with a grace that was reflected in their continuing as members of the Central Committee (although removed from the Politburo).
The Stalinists were now in control, but opposition within the party had started to coalesce during the difficult year of 1932, with one group organized around an expelled party district secretary, Riutin. The “Riutin Platform”, a document that called for the destruction of “Stalin’s dictatorship”, was handed over to the secret police and was treated as a call for armed revolt (Getty & Naumov 2010, p, 33). Riutin and the editorial board of the Platform were expelled from the party and given prison terms (10 years in the case of Riutin). In parallel, Trotsky had reached out to his former followers to forge a new opposition coalition, but this was quickly destroyed by the state authorities and its members expelled and imprisoned. In response, Trotsky wrote a letter directly to the Politburo threatening a mass struggle against the party elite; reminding them of the unstable forces that they had unleashed with their rapid restructuring of society. It is notable that at this stage, those calling for the explicit overthrow of the regime were imprisoned, not executed. In December 1934, Stalin’s close friend Kirov, was assassinated, leading to an emergency Politburo decree that allowed for the summary execution of accused “terrorists” after abbreviated proceedings without the right of appeal; the legal basis for the mass executions that followed, A predominant view is that Stalin himself has arranged the assassination, but recent scholarship has supports his lack of involvement. Kirov’s death did lead to increased repression, including mass expulsions from the party, but the Great Terror was not unleashed until after the August 1936 trial Zinoviev, Kamenev and Smirnov together with other oppositionists for planning to Kirov and Stalin as well as other Politburo members; 160 people were shot in connection to this trial. In September Yezhov was appointed as the head of the NKVD (interior ministry) and the following February Bukharin was arrested. In May 1937 the Terror spread to the officer corps, with eight of the most well-known officers being arrested, the most famous being Marshal Tukhachevsky, the deputy head of defense. After brutal interrogations all confessed and all were shot on June 12th, in the next ten days nearly a thousand senior officer were arrested. By the end of the Terror, nine out ten of the most senior commanders were executed, “among the highest rungs of 186 commanders of divisions, the carnage took 154, as well as 8 out of 9 admirals, 13 of the army’s 15 full generals, and 3 out of 5 marshals” (Kotkin 2017, p. 378). A toll that both greatly reduced the military leadership quality and greatly reduced the possibility of candid feedback to Stalin, setting up the disaster of the first months of the German invasion. A significant number of the senior officers were from pre-revolutionary times, i.e. from the army of the Tsar. This may have played a part in viewing them as “class enemies”, and a few may have conspired at rebellion, but the scale of the purges far outweighed such challenges.
From June the Terror exploded across the Party “in all fields and at all levels” (Getty & Naumov 2010, p. 174), during the next six months “most people’s commissars (ministers), nearly all regional first party secretaries, and thousands of other officials were branded as traitors and arrested” (Ibid.), A mass terror was also inflicted upon the general populace, the victims of which constitute about half those executed. The previous peak in Soviet executions had been 20,201 in 1930; in 1937 and 1938 combined there would be 681,692 (closer to 830,000 if other causes of death during detention are taken into account) out of a working age population of about 100 million (Kotkin 2017). In March 1938, the show trial that included Bukharin began. Just as with Mao and the Cultural Revolution, Stalin would come to recognize the need to rein in what he had started before it destroyed what he had created; Yezhov was removed and blamed for “excesses”, ad the Terror came to a halt in late 1938. If it was only the weaker members of the leadership of the Party that were not seen as threats and therefore survived, such as Khrushchev (see below), what was the impact upon the quality of Soviet decision making longer-term? Given the leadership tenure of this generation until the mid-1980s that quality may have been significantly diminished both by the negative-fitness survivor selection effects of the purges, and the psychological effects upon those survivors. In the Cultural Revolution Mao tended to banish those out of favor, but not eliminate them, allowing for the reconstitution of a functional elite after the worst years of the Cultural Revolution.
Only painstakingly slowly did Stalin fully recognize the immediacy of the menace of a rearmed Nazi Germany led by a Hitler who railed against the “Judeo-Bolshevik” menace. The 1936 Anti-Comintern Pact between Germany and Japan, joined by Italy in 1937, threatened the Soviet Union with attack from both the East and the West. The German annexation of Austria and the partitioning of Czechoslovakia, and the victory of the German-backed Franco in Spain underlined the threat. Stalin also exacerbated the historic enmity of the Baltic States, Finland, Poland and Romania toward the Soviet Union, and there had been repeated discussions between Germany and Poland about the latter joining the Anti-Comintern Pact; which would threaten a joint German-Polish invasion. After the British and French guarantees were given to Poland, the two nations opened talks with the Soviet Union, but the British firstly obfuscated with respect to the formal alliance proposed by the Soviets and then informed Germany that they would not enter into such an alliance with the Soviets (Kotkin 2017, p. 621 & 629). With a German invasion of Poland imminent, the Soviet Union signed a non-aggression pact with Germany on August 23rd, 1939, including secret protocols dividing up Poland and the Baltic States in the event of a German invasion. This resulted in the front line between the Germans and Soviets being moved many hundreds of miles farther away from Moscow than it would otherwise have been, while reclaiming lands taken by the Poles in the 1920 Polish-Soviet War and removing the threat of invasion from the Baltic States. Thoughts that Germany would become bogged down in the West after its invasion of the Low Countries and France in May 1940 were dashed by the rout of the British and French armies. Within a year German forces would be amassed on the Soviet border, with their attack on June 21st 1941 aided by Stalin’s unwillingness to properly mobilize his forces in the face of widespread warnings of an imminent invasion.
Hitler’s plan to fool Stalin worked remarkably well, permitting near-total surprise … Though Barton Whaley lists eighty-four different warnings that should have alerted Moscow, Stalin refused to believe or act on any of them, in part because he did not want to take any action that might provoke Hitler (Gompert, Binnendijk & Lin 2014, p. 85).
The Soviet victory over the Axis powers would cost over 20 million dead together with widespread devastation and capped three decades during which the USSR had faced two invasions by Germany, a brutal civil war that included the intervention of numerous Western nations, a major famine, and The Terror. After all of this, the Soviet Union was faced with an overwhelmingly superior and antagonistic US, and its allies. The alliance to beat the Axis Powers quickly turned into a continuation of the Cold War that had been broken by the Roosevelt administration, with a President Truman (who succeeded Roosevelt in 1945) that had stated in the New York Times after hearing that Germany had invaded the USSR in 1941 “if we see that Germany is winning we ought to help Russia and if Russia is winning we ought to help Germany and that way let them kill as many as possible … Neither of them think anything of their pledged word” (quoted in Butler 2008, p. 324).
the price of defeat in World War 1 was the punitive Treaty of Brest-Litovsk, which was designed to turn Eastern Europe and the westernmost parts of Russia into a German preserve through a system of satellite states and economic exploitation … the civil war that followed the October Revolution drew in foreign powers including Great Britain, France, Japan, and the United States … in 1941 invading Axis forces advanced six hundred miles into Soviet territory in four months on their whole front and were only checked after twelve months, by when their southern armies had advanced a thousand miles into the Soviet Union … in 1959 the U. S. Strategic Air Command had 1,750 bomber capable of nuclear strikes on the Soviet Union, which lacked an effective means of attacking the United States. (MccGwire 1991, p. 8)
This imbalance led to a massive redirection of economic resources toward the military, and away from the development of the civilian economy, in an attempt to address the disparity with the US and NATO. This was at the same time that resources also had to be redirected to the massive physical reconstruction efforts required to overcome the devastation of the war years; a reconstruction impeded by the losses of so many millions of people in their prime working years. The incredible achievements of the Soviet planning apparatus in both industrializing the Soviet Union in a decade, and in overcoming the colossal devastation and manpower losses of the war to produce an extensive welfare state, increasing living standards for its citizens and a fearsome military capability cannot be underestimated.
The 1949 consolidation of the French, English and US zones of occupation into a rejuvenating West Germany, that became a member of NATO in 1955, can have only added to Soviet concerns. The rift with China in the late 1950s also created a rival on the Soviet’s eastern border. Given the Marxist-Leninist assumption of existential conflict between communist and capitalist systems, supported by US behaviour and statements that called for the destruction of the Soviet system, Soviet defense policy was directed toward not losing a war; losing meant the destruction of the communist system within the USSR. The resulting defensive posture was reflected in the maintenance of the Eastern European buffer (including the previously belligerent Poland, Baltic states, and Western Ukraine), the focus on a Communism In One Country that seriously limited the Western European left wing, and acquiescence to the Western dominance in Italy and Greece (Kolko 1990); which in the latter case included the use of Allied troops to defeat a communist insurgency. This defensive posture also drove Soviet military doctrine, with the USSR in a constant state of catch up with the West.
As fast as they caught up or developed a counter in one area of military technology, the United States would introduce a new weapons system that outflanked them … In the 1950s it was the United States that enunciated the policy of devastating strikes upon the Soviet Union known as massive retaliation; it was NATO … that declared that it had integrated its arsenals and would use conventional or atomic weapons as appropriate. Soviet war planners had to accept these and other constraints, and … they were strategy takers, unlike the Germans in World War II who were strategy setters. (MccGwire 1991, p. 16)
On March 5th 1953, Stalin died and with the aid of General Zhukov (the military hero of WW2) Khrushchev established his leadership; including the execution of Stalin’s head of state security, Beria. Three years later, Khrushchev delivered the Secret Speech (which was relatively widely circulated within the Party and Eastern Europe) that was a “devastating attack on Stalin” who was said to be “guilty of ‘a grave abuse of power’” (Taubman 2012, p. 271) while glossing over his own extensive involvement in The Terror and wartime mistakes. A process of de-Stalinization was carried out, that included the rehabilitation of about twenty million victims of Stalin’s terror (both alive and deceased), and the release of those still imprisoned. This process undermined the Polish and Hungarian regimes, leading to increasing unrest. In the former this was successfully met with reforms, but in the latter the Soviet leadership “were in over their heads” (Taubman 2012, p. 300) and the crisis led to direct military intervention to crush the uprising. In July 1957 Khrushchev very narrowly survived an attempted putsch. During the Khrushchev era (1953-1964) there was a limited amount of economic liberalization, some of which was reversed during his tenure, together with some political decentralization.
Khrushchev had attempted to ease Cold War tensions through many unilateral actions, such as “deep unilateral cuts in Soviet armed forces … [pulling] troops out of Austria and Finland [and encouraging] reform in Eastern Europe” (Taubman 2012, p. 399). Mirroring its response to the unilateral overtures provided by Gorbachev three decades later, the US
refused these overtures … made their acceptance subject to conditions he as a Communist considers impossible. We are in the process of rearming Germany and strengthening our bases surrounding Soviet territory … He has offered a European settlement based on the status quo while we engage in economic competition (US Ambassador Llewellyn Thompson quoted in Taubman 2012, p. 399).
The 1960 shooting down of a US U2 spy plane which had flown deep into Soviet air space served to poison the relationship between the two nations, and the failed 1961 US Bay of Pigs invasion of Cuba together with the start of the construction of the Berlin Wall (to stop the exodus of East Germans through West Berlin) increased the tensions. In response to the US attempted invasion, and the stationing of US nuclear missiles in Italy and Turkey, the Soviet Union clandestinely placed nuclear missiles in Cuba. The resulting 1962 Cuban Missile Crisis came close to triggering a nuclear war, with this visceral threat of mutual annihilation creating a somewhat less antagonistic relationship between the US and the USSR that facilitated the later détente at the end of the 1960s. The Brezhnev years (1964 to 1982) were ones of stability, rather than change, but with a greater focus on military spending and advanced technology and less on the production of consumer goods.
His leadership had started propitiously, with the “Brezhnev Thaw” that included a continuation of the loosening of media control that had occurred under Khrushchev, but with a less celebratory and more reflective tone; the media acting as a critical lens to identify such things as entrenched bureaucracy and corruption. Such an official mandate did not sit well when it was directed at those within the power structure, and the latter’s sense of being under attack was exacerbated “particularly after the 1963 decision to end jamming of foreign radio stations” (Huxtable 2016, p. 32) and from the dissident samizdat publications. With political unrest in Eastern Europe – especially in, but not limited to, Czechoslovakia, the tension between the revolutionary possibilities of press freedom and the need for political stability came more to the fore. The thaw started to turn into a freeze from 1965 onwards “Gradually, deviation from established truths were considered dangerous; ‘liberal’ became a term of abuse” (Huxtable 2016, p. 34). By 1968 Kosygin’s (the reformist Premier) general reformist path, which included a small liberalization of economic planning and management, had been defeated. An early very limited attempt at the later Perestroika and Glaznost had been snuffed out, with a repeat of the 1956 press crackdown that stemmed from many of the same concerns (which included the unrest in Hungary).
By 1974, the country had seen trials of prominent intellectuals, a crackdown on suspect thought within the social sciences, and by September an exhibition of “non-conformist” artists in Izmailovskii Park, Moscow, was literally crushed by the authorities, which gave it the name by which it is now known: the “Bulldozer exhibition”. (Huxtable 2016, p. 21)
The Brezhnev era became “associated with conformity, pessimism, and stability” (Ibid.). At first to “grease” the central planning wheels and to meet some of the unmet consumer needs, an illicit economy had developed during the Stalin years. This grew during the Khrushchev period, and accelerated under Brezhnev into a full-blown parallel economy that involved the widespread corruption of state and party officials, reaching to the very top (Keeran & Kenny 2010, ch. 3); “the top operators in the shadow economy were an indispensable part of Brezhnev’s power base – and some indeed were close family friends” (Crump 2014, p. 209). With an increasing share of oil production being exported in the post-war period, the result was a substantial increase in Soviet foreign exchange revenues. This effect was accelerated by the sustained jump in oil prices after the first oil shock at the beginning of the 1970s, together with increases in natural gas exports.
These foreign exchange revenues were used to purchase the goods that the Soviet economy did not provide – such as new technologies, consumer durables and food. The oil rent funded imports that filled the gaps in the heavy industry, and military industrial complex, focused Russian economy. “The unbelievably strong (and increasing since the 1970s) dependence of the Soviet Union on, first of all, imports of wheat and a number of other categories of consumer and industrial goods, especially high-tech ones, became one of the plates in its armour” (Ermolaev 2017). The 1970s increase in oil prices only added to this “When oil prices increased (and they continuously increased between 1974 and 1980), there was a temptation to boost imports even more” (Ermolaev 2017). The large increases in both oil and natural gas production also fuelled a domestic economy that was highly energy intensive, including personal fossil fuel consumption that was heavily subsidized (compared to international prices) by the state. In contrast to many Western nations, the USSR did not increase energy efficiency in response to the oil price jumps of the 1970s.
The collapse in oil prices in the 1980s hit a Soviet economy highly dependent upon fossil fuel foreign exchange earnings for meeting basic consumer needs. This can be seen as at least a contributing factor to the sense of crisis that led to Gorbachev’s attempts at reform and the later dissolution of the Soviet Union. The state had been able to delay necessary reforms due to the previously surging amounts of foreign exchange earnings, allowing the underlying problems to compound further.
It seemed a cure for all problems . . . Do [we] really need to solve the food problem radically and quickly, when it’s so easy to buy tens of millions tons of grain, followed by huge amounts of meat, and other food products from America, Canada and Western European nations? Do we really need to pull our construction industry out of the horrible underdevelopment, if we can just utilize Finnish, Yugoslavian or Swedish construction specialists to build or reconstruct important objects and import the scarcest materials and plumbing equipment from West Germany, and shoes and furniture from other places? Many of my colleagues and I, in the end of the 1970s until the beginning of the 1980s, were thinking that the West Siberian oil saved the economy . . . then we started to come to the conclusion that this wealth had at the same time seriously undermined our economy; the due and overdue reforms were continuously postponed. (Arbatov quoted in Ermolaev 2017)
The Soviet Union was not well positioned for the changes required to remedy its lagging performance in economic growth and commercial technology (as against military and space technology) and its inability to provide for increasingly complex and heterogeneous consumer needs. This was made worse by the intensification of the corruption of the state and society,
during the last three decades of the Soviet era, illegal economic activity penetrated into every sector and chink of the economy; assumed every conceivable shape and form; and operated on a scale ranging from minimal or modest for the mass to the substantial for the many, to the lavish and gigantic, as well as elaborately organized, for some … the shadow economy spread out, grew, and prospered – under Brezhnev (1964-82) thanks to benign neglect if not tacit encouragement. (Grossman 1998a, p. 31)
Much of this activity involved stealing time and materials from the state; a precursor to the wholesale looting that took place from the late 1980s onwards. The rapid phase of Soviet growth, from the 1950s to the early 1970s had been based on an “extensive” growth model, utilizing greater and greater amounts of labor (freed from intensified agriculture), land and raw materials. With the end of the labor surplus provided by the intensification of agriculture, raw material depletion that required the development of the higher cost Siberian deposits that “swallowed up a large fraction of the investment budget for little increase in GDP” (Allen 2001, p. 876), and a heavy redirection of R&D activities from commercial to military uses, the growth rate fell from the early 1970s onwards. Allen (2001) also points to a redirection of investment from the building of more modern plants to the maintenance and upgrade of current plants, as further reducing the growth rate. The ecological degradation caused by the intensive utilization of marginal lands, exemplified by the depletion of the Aral Sea to grow cotton, may also have constrained agricultural productivity. As noted above, the availability of the large amounts of foreign exchange provided by the rapid rise in oil prices in the 1970s also provided policy options that did not require the underlying economic problems be addressed.
The two premiers following a Brezhnev who suffered a serious decline in health in his last decade (dependent on tranquilizers and having suffered two strokes), an Andropov who suffered total kidney failure in early 1983 (1982-1984) and the terminally ill Chernenko (1984-1985), were not alive long enough to have any real reformist impact. With Brezhnev having greatly reduced the turnover of the nomenklatura the administration had become significantly geriatric, stifling the ability to develop new talent and be open to new ideas. Even as late as 1984, the leadership considered that only incremental reform was required.
the Soviet leadership still believed that [a strong Soviet economy] could be achieved by shaking off the stagnation of the late Brezhnev years and following through on fairly simple reforms [which] would include speeding up the shift from extensive to intensive development; improving the planning of production, the allocation of resources, and the distribution of goods; eliminating waste; and increasing the efficiency of managers and the discipline of the workforce. (MccGwire 1991, p. 158)
Between 1928 and 1970, the USSR was the third fastest growing economy in the world. At the peak of the Soviet economy in 1975, the GDP per capita was higher than Mexico, Latin America, South Korea, Taiwan (Ricon 2016), and of course, a China that was as poor as Africa. Russian GDP per capita was also just below 40% that of the US, 35% as late as the early 1980s, and did not start to fall rapidly with respect to the US until very late in that decade and after the start of the Gorbachev reforms (Ricon 2016). At this point, the Soviet economy may have been capable of slow growth for a significant period and the ensuing collapse was not an inevitably.
even though Soviet socialism had clearly lost the competition with the West, it was lethargically stable, and could have continued muddling on for quite some time. Or it might have tried a Realpolitik retrenchment, cutting back on superpower ambitions, legalizing and then institutionalizing market economics to revive its fortunes, and holding tightly to central power by using political repression. (Kotkin 2001, Intro., para. 2)
In 1985 Gorbachev became premier, with a mostly unreformed state planning system that had been significantly corrupted, and a growth model that could only produce extremely slow levels of economic growth. In the first two years of the Gorbachev leadership (1985-87), a generally reformist stance was taken in an attempt to reduce corruption and increase the efficiency and effectiveness of the communist system. Even a reformist stance threatened many in the nomenklatura and their lifestyles. In many ways the nomenklatura could be likened to a non-capitalist oligarchy, but with their lifestyles and ability to push forward their offspring wholly dependent upon the continuation of their positions within the Party; with the exception of the illegal wealth obtained through the extensive corruption. This is very different to a capitalist oligarchy that owns the wealth that supports their lifestyles and can pass that wealth from one generation to another. There were three main interest groups, each representing a “combination of monopolies, their suppliers and customers who greatly depended on their success, and their representatives in the top political cadres … the defense-industrial complex (OPK), agro-industrial complex (APK) and fuel-energy complex (TEK)” (Guriev 2019, p. 125). The ossification of the Soviet state and Party, and the human composition of the interest groups within it, was very different to the experience of China, where collectivization and central planning had only been in place since the late 1950s and the upheavals of the Cultural Revolution and its aftermath had produced instability, rather than stability, in the elite. The sheer scale of the Chinese population also facilitated a lower level of political centralization.
The US Ambassador to Moscow attended the trials of the senior officials and generals he had met and came away convinced that all were guilty as charged, simply based on the evidence presented. It was a risky, but necessary house cleaning.
Interesting read. I wonder, though, at the accuracy of Kotkin's description of the 'status' of the citizenry in the USSR. (in your quote)
"Looked at soberly, Stalin’s anti-capitalist experiment resembled a vast camp of deliberately deprived workers, indentured farmers, and slave laborers toiling for the benefit of an unacknowledged elite."
Maybe there's more detail in the passage. Does he say of what the workers are 'deliberately' deprived, and by whom, and why? What needs were focused on at this time by the State central planners?
To whom and why are the farmers 'indentured'? To whom are they indebted or in contract with? Another private individual, or is the arrangement rather like contracted free labor?
'Slave laborers' I think we can let sink in the water. There was no Master with a whip forcing human beings to sleep in dog sheds. People were not the private property of another individual.
An elite, unacknowledged or open secret, we can let stand- though I don't think the Soviet system was so corrupt (then or ever) that all the 'toiling' (earlier in the narrative rather argued for as necessary as war preparation, then as forced by siege & encirclement in the Cold War) was for the benefit of this elite as such. This isn't capitalism.