2.3 Econ Under Khrushchev & Co Flashcards
(22 cards)
1955 Problems economy
High military spending
Inherent inefficiency of the command economy
Reduced power of the secret police and absence of terror
bureaucratic system and atmosphere of terror=wasteful and inflexible
De-Stalinisation
focus on agriculture & consumer goods, decentralisation
managers given 40% profits to invest
Sovnarkhozy 1957: 105 regional councils
Incentives: working week 48h to 41h by 1960
vocational education for industrial development
Khrushchev’s Economy: main aspects
Lower taxes, state purchases
Decentralisation through regionalisation & divisions
Focus on agriculture & consumer goods
Rise in living standards
Developed agriculture as a base for industrial development
6th 5YP
1956-60
Virgin Lands campaign
Military spending reduced from 1955 12% to 1958 9%
7th 5YP
Volga-Urals mineral discovery = development of chem industry
Lieberman Plan 1962: market-based econ (watered down)
Reduction of grain requisitioning, planned state purchases
concessions to private plots
7th 5YP: AIMS
light industry focus: broaden econ bae
increase chem production
boost agriculture & consumer goods to raise living standards
7th 5YP: RESULTS
consumer goods increased by 60%, fertiliser production increased 19 M tons
unpopular with Party, confusion planning
quantity>quality
military spending 12% 1964 (Arms race & Cold War)
nearly all eggs produced privately
Why reform Agriculture
Khrushchev believed he was an expert (peasant background)
command econ & gosplan undermining local initiative
1953 livestock figure less than 1913
industry held up
unacceptably low living standards
collect. not working
Khrushchev’s changes in Agriculture
MTS abolished -> peasants bought own machinery (naive, unsuccessful)
1955: individual collectives given more power, ++ flexibility
AGROGORODAS: agro-industrial villages
Linked food production & processing
economies of scale
++ investment into agriculture = ++ mechanisation, irrigation and fertilisers
Unpopular with peasants (felt separated from land)
Virgin Lands Scheme 1956-60
volunteers from Komsomol put to work in Siberia & Kazakhstan to increase production
Consumer goods increased (despite not meeting targets, impressive progress)
Living standards rose
Quality of goods was poor, useless products were made to meet targets
Results of Khrushchev’s Econ Policy
econ growth rate was 7.1% 1950s, USA’s was 2.9%
USSR still behind: economic base was smaller
Poor labour productivity, inefficiency
Sovnarkhozy made national planning difficult (local conditions hard to foresee)
Confusion in Party due to Agricultural/Industrial split
Party opposition: M-I complex too powerful
Military-Industrial Complex
link between armed forces and sectors of econ that manufacture their products
(Influence each other and general econ)
took 18% resources, employed 30Million out of 150Million pop
needed for self-sufficiency & wars
SUCCESSES: KHRUSHCHEV
VLS: agricultural output increased from 80 Million tons 1949 to 110 Million tons 1954
By 1956, 36 Million hectares of land transformed & under cultivation
An attempt to improve (unlike Stalin), impressive progress (relatively)
Living standards rose = daily life improved
FAILURES: KHRUSHCHEV
Experimentation with other grains (e.g maize) failed
Lots of interference but not enough research = policies failed to meet promises
Lack of investment into fertilisers, grain storage, transport of produce… (crops rotted before delivery)
Over-farming = drop in harvest from 1958 onwards
Unsuitable climate for VLS: 6M hectares of land destroyed in Kazakhstan (lack of rain…)
Kosygin Reforms
PM Alexei Kosygin 1964
encourage creativity in decision-making
opposed by conservatives= watered down
Brezhnev made output bonuses > creativity of innovation bonuses
shortage of needed goods, few expensive items produced
Brezhnev’s Reforms
1973 industrial complexes + scientific research institutions: latest tech in production
1974: target system centralised, focused on cost & profit (away from output obsession)
rigid nature of command economy, changes were very small
New machinery not used: managers feared output loss during installation
Prices set by government did not consider supply/demand
Ninth 5YP 1971-75
Push for ++ consumer goods, higher rate of growth than heavy industry
living standards rose, impressive progress
By 1980, 85% of families had TVs, 70% had washing machines, 9% had car but high investment in public transport
M-I complex remained powerful
Agriculture under Brezhnev
1976: 26% budget to agriculture
Brigade system: peasant groups decided how to manage profit
++ concessions for private plots: grew 25% of food on 1% land
VLS dropped, power to ministry
FAILURES: Brezhnev’s reforms
Cautious, conservative
Ill health -> significant reform impossible
Command economy did not work when growth needed quality & efficiency
Output improved only in limited range of goods
Failure to reform key factor behind USSR collapse
Andropov’s Policies
Focus on removal of corruption, labour discipline, alcoholism & absenteeism
No effect/Failure: Gov. officials punished slackers which made Andropov & his reforms unpopular
Factors behind economic collapse
lack of investment
“social contract”
outdated tech use
legacy of stalinist system
dominance of M-I complex
inherent problems in command econ (no intiative…)
“Social Contract”
brezhnev
‘We pretend to work and they pretend to pay us’
little productive work
economic sanction threat not real: gov couldn’t afford to close a factory
