Skip to comments.Vanity - What were the economic reasons for the Soviet Collapse?
Posted on 10/14/2010 8:59:16 PM PDT by tired1
Aside from the obviuous shortcommings of central planning, I'm interested in the circumdtances which caused the USSR to implode. Was it inability to meet foreign obligations?
Would appreciate opioions and any sources.
internal cycles causing an economic vortex where the intake was greater than the outlay
Beat me to it
Uhhhh - Cause Communism doesn’t work?
Too many guns, not enough butter.
It was God’s will....He used Ronaldus Magnus......
Yep, Ronnie just sped up the inevitable. At the time I said that we and the Commies were like two cars in an endurance race, and the finish line is 100 miles away but they only have 90 miles worth of gas. And if we floor it, they have to as well, cutting their mileage and speeding up the inevitable.
Unfortunately, it is starting to look like maybe we only had 99 miles worth of gas...
“we win, they lose”
Victory by Peter Schweitzer
On the Brink by Jay Winik
Oil played a part.
In the early 80’s, the US started a “synthetic fuel” project which spooked the Saudies (OPEC). OPEC, in response, upped its production to make syntheic fuel too expensive to make. This crashed the oil price by half and denied the Soviets it’s primary cash source (oil).
Combined with a faultering centralized economy, unenthused work force, and an arms race from the US, the Soviet economy collasped.
2 letters - B2.
Once upon a Christmas Eve in 1991, . . .
A combination of $11 a barrell oil and a crashing ruble and Reagan forcing the USSR into a spending war to keep pace in arms when they could least afford it.The USSR never had an ecomomy other than arms manufacture and energy resources. When energy prices crashed, the ruble crashed wiih it. The perfect storm
This is strictly my opioion (couldn’t resist). RR got the best intel he could - he was surrounded by the smartest cold warriors and new conservative patriots.
They determined we could sweat the Soviets in a game of attrition.
Reagan called their bluff.
Hot water in only 25% of dwellings on the inside of this ‘worker’s paradise’ was a mitigating factor as well.
For one thing, you could be arrested
and I mean arrested
for “making a profit” on something.
Also some of the best jobs were for “snitches” for people to turn in their neighbor for being politically incorrect against Marxist Leninism.
Yes, the term “politically incorrect” originated with Stalin. It was a CRIME.
So you were spied on for money by your neighbors and you had no way of making a living, totally at the mercy of the state. Plus the USSR kept on a “war footing” with the West, so it was a survival during wartime mentality.
Coming soon to the USSA.
I’m fairly familiar with Reafan’s policies. Back in ‘84 I wrote an ecomons paper predictimg they would collapse based on econ data they published in the UN. Clearly they had cooked the books for decades. I’m curious about why one day they just said “screw it”.
The ruble was inconvertable and they could have simply inflated as they had in the past. They could also have restructured foreign payments, as Russia subsequently did.
So you think it was hard currency deficit?
They had rulers who hated the free enterprise system, nationalized their industries, and punished anyone who tried to make an honest living.
Oh, wait ... I’m confusing it with the United States of America under Barack Hussein Obama.
Letting them steam toxic software to control the pipelines was pretty slick!
Yuri Bezmenov (youtube) provides some insight to this as well. The subversive methods of the KGB eventually came back to bite them in the ass.
Your’re not at all confused.
Don’t have any sources anymore but I do remember an analysis of their central planning problems. It seems as though they couln’t figure out how much anything cost. They set prices by extrapolating from prices they paid for Western goods. The price of electricity was always a mystery.
Sorry I can’t remember where I would have read it but stuck in my mind because I was just discovering the Austrians & was very excited about this insight. Sometime in the early 80’s.
It was one of many issues. Not much the Soviets could export for hard cash except for its resources and weapons.
Wanna $10 AK47? Com on down to crazy Ivan’s house of guns!!!!
Corruption in commie govt.and the money they spent in Vietnam.
Yes, a hard currency deficit cuased by collapsing energy prices which was a main source of their income.That is why they never had any goods on the shelves to sell at the end. They never had a dynamic economy and they had all those third world satellite beggar nations who depended on them for support.Reagan once asked rhetorically in a cabinet meeting what do we have more of than the USSR. Many thought he was referring to missiles. He said money.And that was the game plan to outspend them into oblivion.
steam = steal (speel check doesnt work)
In addition to some of the causes already listed there was a vital transmission belt which led to the collapse of the Soviet Union.
The KGB was one of the few institutions to have the real numbers regarding the Soviet decline and inability to compete. Seeing no future with communist policy, they completely abandoned the Politburo and the Party.
With an unpaid army remaining in barracks, and the KGB disloyal, the Soviet government had no teeth. This is why the dissolution of the USSR was -relatively- bloodless.
It will be interesting to see what happens when and if the USA truly does become bankrupt, and even the D.C. IOUs are refused.
Not familiar with that initiative- please expound.
So they ammased a huge pile of debt and called it quits?
Overspending on Defense to keep up with the Joneses, think the Good Ole U.S. of A.
Inability to financially support satellite states, Poland, East Germany, Hungary, etc.
Over reaching on expansion and military ventures, think Crapganistan.
Failure to open new markets for oil, again think Crapganistan.
Marginalized on the world stage, think Reagan, The Pope, Jeanne Kirkpatrick, Margaret Thatcher.
The USSR failed for the same reason any planned economy eventually fails: you need robust markets where people can buy and sell freely for price to function as a register of value.
Also, the USSR had no concept of bankruptcy. So non-performing firms could persist forever, destroying value, with no market incentives to innovate their operations.
The Reader’s Digest Version: “In fact, the amount of Moscows annual borrowings in the West was roughly equivalent to the total cost of all of the Soviet Unions foreign commitments. In other words, the West in the 1980s was unwittingly providing crucial financial life support to the Soviet regime on the order of 100% of the cost of its external empire. President Reagan believed that this remarkable set of facts offered the U.S. a non-military means of rolling back Soviet global power and repression while creating a financial train wreck within the country from which Moscow would probably not recover. As history has shown, it didnt.
When Soviet forces began to mass on the Polish border in 1981 and later forced the imposition of martial law in that country, President Reagan responded with a number of policy measures, including implementation of what we called the “strategic trade triad.” Specifically, this meant sharply limiting Moscows access to:
1) Western Europes natural gas markets; 2)officially subsidized lending arrangements; and 3)sophisticated, militarily-relevant U.S. and Western technologies.
The so-called Siberian gas pipeline dispute within the Atlantic alliance in 1982 occurred in this context and tested Americas resolve that the second 3,600-mile strand of this huge two-strand pipeline project not be built. The already-committed first strand would also be delayed by embargoing key U.S. oil and gas equipment and technology which was unavailable elsewhere. The cost to Moscow of losing the second strand of the Siberian gas pipeline was to be roughly $10-15 billion annually — a debilitating sum — not to mention the costs of a two year delay in bringing the first strand on-line. (This effort was complimented by the Reagan Administrations intervention with the Saudis urging them to increase oil production and thus lower prices representing another blow to Soviet hard currency earnings.) These three major economic initiatives to curtail Western life-support to the USSR were combined with a massive U.S. military build-up, the launch of the Strategic Defense Initiative and head-on U.S. engagement against Soviet aggression in the Third World to accelerate, if not cause, the end of the so-called “Evil Empire.” It is no coincidence that the Kremlin defaulted on some $90 billion in Western debt a mere two days before the collapse of the Soviet Union in December 1991.” - Remarks of Honorable Roger W. Robinson, Jr.
President and CEO of RWR Inc. and former Senior Director of International Economic Affairs at the National Security Council
Alaskan World Affairs Council May 7, 1999
Wasn’t Maggie supposed to meet with Sarah P this fall?
Could be a passing of the torch.
“We pretend to work; they pretend to pay us”
Rent and watch “Lives of Others.” You’ll see.
They did meet.
Wasn’t gold also one of the factors? I seem to recall reading that encouraging South Africa to naintain high gold production dropped the price that the Russians could earn for their gold.
Can’t recall the project’s name but it something like this: Canadian intel let CIA know what KGB tech spies were after. Reagan and Casey came up with a SUPER secret plan to let them steal. Bobby Inmann was also involved. They took everything they could get their hands on only to find that some stuff had been “modified”. One of the itmes was software that controlled the pumps on their gas pipeline compressors.
Well, one day there was an explosion that was picked up by satellite. Gorby knew he was screwed! There was no way to tell what was safe because they’d been stealing for such a long time.
The Soviet Union was papa bear of the Communist bloc. Their currency, the ruble, was the coin of the realm in their bloc. The wealthy West was not about to offer to bail their enemy out. They really had no one they could borrow from when the ruble became worthless. So I am not sure whether I would characterize it as debt or a worthless currency that could not be exchanged for goods for import. Basically, they had no money, no goods and no one in the West was going to loan them money until the regime crashed.
The USSR's downfall was that it was too big to fail.
We (America/Reagan) provided support to him, just how much support is unclear.
Are you shitting me?? Why do you think it is our job to educate you about a subject like that? What makes you think that anyone here could possibly explain almost 100 years of brutal repression and economic failure to you?
Hit Wiki and do a couple of years of reading Zippy, and quit wasting someone else’s expensive bandwidth.
There. Someone needed to say it.
Thanks- what a convoluted world. Tireless patriots manning the walls- thank God for these unsung heroes.
Whatever the cause, the core moment as I remember watching live tv then was the inability to print paychecks for government workers. No pay, no prospect of pay, everyone just went home.
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