BREZHNEV AND ECONOMIC STAGNATION
Economic Stagnation refers to period (starting in the 1970's) when the Soviet economy began to stagnate, meaning it stopped growing. It stopped growing as industrial and agricultural production decline. The result of this was a decline in the standard of living for millions of Soviet citizens as the cost of living increased.
Before you go any further, read the document below and complete the task:
Before you go any further, read the document below and complete the task:
| who_do_you_hire.docx |
Who did you choose? Why did you choose that candidate? Did you consider the past history of the company and who was best to lead the company forward in the uncertain future? Brezhnev was like candidate B or C- he was seen as a safe pair of hands.
Now watch this video...
Now watch this video...
But Khrushchev's prediction was wrong- the USSR never did overtake the USA.
Between 1953 and 1970, the USSR experience an unprecedented rise in the standard of living. However, after 1970, the standard of living began to decline. This was the start of a period of economic stagnation which ultimately contributed to the collapse of the Soviet Union in 1991.
A large reason for this was Brezhnev's increasingly conservative leadership. He was the anti-Khrushchev and seen as the answer to instability of the tumultuous period that included the 'Secret Speech', Hungarian Uprising and the Cuban Missile Crisis. However, unbeknown to the ruling elites, he was the wrong man at the wrong time for the USSR and events during the 1960's and 1970's (such as the USA's defeat in the war in Vietnam and the OPEC oil embargo) only lured the Soviet Union into a false sense of security.
Look at the timeline below for an overview.
Between 1953 and 1970, the USSR experience an unprecedented rise in the standard of living. However, after 1970, the standard of living began to decline. This was the start of a period of economic stagnation which ultimately contributed to the collapse of the Soviet Union in 1991.
A large reason for this was Brezhnev's increasingly conservative leadership. He was the anti-Khrushchev and seen as the answer to instability of the tumultuous period that included the 'Secret Speech', Hungarian Uprising and the Cuban Missile Crisis. However, unbeknown to the ruling elites, he was the wrong man at the wrong time for the USSR and events during the 1960's and 1970's (such as the USA's defeat in the war in Vietnam and the OPEC oil embargo) only lured the Soviet Union into a false sense of security.
Look at the timeline below for an overview.
However this does not adequately explain the process of how economic stagnation happened, it only provides clues. To understand this, you will need to go into more depth on how the Soviet Union's centrally planned economy worked.
The Soviet economy was a centrally planned or command economy. This meant that workers were given targets and quotas by central planners in Moscow. These central planners were part of a large bureaucracy that removed local autonomy, meaning mid-level managers were micro-managed and were little more than a conduit between the workers and central planners.
The workers themselves had fixed incentives as part of this system, including guaranteed employment, access to healthcare and education and a government apartment. The system relied on full employment in order to collect taxes to fund the fixed incentives. When the Soviet economy began stagnating as a result of declining productivity, the standard of living began to drop as costs began to rise. This was because there was no longer enough money in the Soviet system to continue funding and subsidising the costs of living.
Although the Soviet economy had shown signs of stagnating before 1976, the reasons for stagnation were inherent within the Soviet economic system and were compounded by a failure to reform. We have already discovered that Brezhnev was an increasingly conservative and reactionary leader with a cult of personality ruling in partnership with an elderly and conservative Politburo.
He lacked the political imagination (as Khrushchev and Kosygin had) to anticipate these problems and make appropriate changes. His increasingly strong grip on the Politburo at the expense of Kosygin in particular was also a problem. His leadership came at crucial time for the Soviets within the context of global macro-economic changes, as the West made necessary innovations to reduce their dependence on Middle Eastern oil and embraced new technologies.
In this way, political stagnation led to economic stagnation. Look at the presentation below:
The Soviet economy was a centrally planned or command economy. This meant that workers were given targets and quotas by central planners in Moscow. These central planners were part of a large bureaucracy that removed local autonomy, meaning mid-level managers were micro-managed and were little more than a conduit between the workers and central planners.
The workers themselves had fixed incentives as part of this system, including guaranteed employment, access to healthcare and education and a government apartment. The system relied on full employment in order to collect taxes to fund the fixed incentives. When the Soviet economy began stagnating as a result of declining productivity, the standard of living began to drop as costs began to rise. This was because there was no longer enough money in the Soviet system to continue funding and subsidising the costs of living.
Although the Soviet economy had shown signs of stagnating before 1976, the reasons for stagnation were inherent within the Soviet economic system and were compounded by a failure to reform. We have already discovered that Brezhnev was an increasingly conservative and reactionary leader with a cult of personality ruling in partnership with an elderly and conservative Politburo.
He lacked the political imagination (as Khrushchev and Kosygin had) to anticipate these problems and make appropriate changes. His increasingly strong grip on the Politburo at the expense of Kosygin in particular was also a problem. His leadership came at crucial time for the Soviets within the context of global macro-economic changes, as the West made necessary innovations to reduce their dependence on Middle Eastern oil and embraced new technologies.
In this way, political stagnation led to economic stagnation. Look at the presentation below:
One might also argue that there was also an inherent problem within the Soviet system that goes beyond the notion of command economy. Once again, we turn to politics, particularly political ideology. The Soviet Communist ideology (or Marxist-Leninism) was formed out of a belief that the capitalism and subsequent imperialism born out of the Industrial Revolution was wrong- it exploited workers and encourage unethical behaviour, violating the self-determination of different ethnic groups.
The first half of the twentieth century seemed to confirm this. Many Marxist-Leninists saw World War I, the Great Depression and World War II as examples of the failure of capitalism. However there was something that Marxism-Leninism overlooked and therefore failed to appreciate about the nature of western capitalism.That was the ability of capitalism to reform itself and adapt- reacting to worldwide macro-economic trends in the 1970's being a classic example. Marxist-Leninism did not have this attribute embedded in its DNA because it believed itself to be the final answer to the problems of capitalism.
Part of this problem may be due to the fact that Marxist-Leninists are often seen by historians as 'vulgar Marxists'. Karl Marx was an historian and a political scientist first and foremost and 'The Communist Manifesto' was a critique of the capitalist system rather than a platform to spell out political ideas. People like Lenin succeeded in 'politicizing' a socio-economic-political study into living and working conditions in western European cities and turning this into the foundation of a political ideology. It should therefore be of no surprise that the Soviet Union ultimately collapsed in 1991 as there was also a failure of ideas from within the system.
The first half of the twentieth century seemed to confirm this. Many Marxist-Leninists saw World War I, the Great Depression and World War II as examples of the failure of capitalism. However there was something that Marxism-Leninism overlooked and therefore failed to appreciate about the nature of western capitalism.That was the ability of capitalism to reform itself and adapt- reacting to worldwide macro-economic trends in the 1970's being a classic example. Marxist-Leninism did not have this attribute embedded in its DNA because it believed itself to be the final answer to the problems of capitalism.
Part of this problem may be due to the fact that Marxist-Leninists are often seen by historians as 'vulgar Marxists'. Karl Marx was an historian and a political scientist first and foremost and 'The Communist Manifesto' was a critique of the capitalist system rather than a platform to spell out political ideas. People like Lenin succeeded in 'politicizing' a socio-economic-political study into living and working conditions in western European cities and turning this into the foundation of a political ideology. It should therefore be of no surprise that the Soviet Union ultimately collapsed in 1991 as there was also a failure of ideas from within the system.