History of the Soviet Union (1953-1985)
De-Stalinization and Nikita Khrushchev
After Stalin's death, Nikita Khrushchev shocked delegates to the 20th Party Congress on February 23, 1956 by publicly denouncing him as a tyrant with an elaborate "cult of personality". This effectively alienated Khrushchev from the more conservative elements of the Party.
Khrushchev became Premier on March 27, 1958 after a long and complex series of maneuvers, notably the crucial removal of Stalin's obvious successor, Beria, head of the KGB. Even before this watershed speech, however, the new leadership declared an amnesty for some serving prison sentences for criminal offences, announced price cuts, and relaxed the restrictions on private plots. De-Stalinization also spelled an end to the role of large-scale prison labor in the economy.
The ten-year period that followed Stain's death also witnessed the reassertion of political power over the means of coercion. The party became the dominant institution over the secret police and army.
Nikita Khrushchev
Khrushchev outmaneuvered his Stalinist rivals. But he was regarded by his political enemies - especially the emerging caste of professional technocrats - as a boorish peasant who would interrupt speakers to insult them.
In one famous incident at a United Nations conference on October 12, 1960, Lorenzo Sumulong, the Filipino delegate, asked Khrushchev how he could protest Western capitalist imperialism while the Soviet Union was at the same time rapidly assimilating Eastern Europe. Khrushchev became enraged and informed Sumulong that he was, "a jerk, a stooge and a lackey of imperialism," then removed one of his shoes and banged it on the table several times for emphasis. The Politburo was mortified.
Khrushchev was deposed in 1964. The Cuban missile crisis, his personal mannerisms, and his reformist positions on central economic planning, which alarmed party cadres and state bureaucrats. After seven years of house arrest, Khrushchev died at his home in Moscow, USSR (now Russia) on September 11, 1971. He is interred in the Novodevichy Cemetery, Moscow, Russia.
The Brezhnev era
After 1964, First Party Secretary Leonid Brezhnev and Premier Aleksei Kosygin emerged as the most influential cadres in the new collective leadership. Eager to avoid Khrushchev's failures, Brezhnev and Kosygin, who represented a new generation of post-revolutionary professional technocrats, conducted state and party affairs in a discrete, cautious manner.
By the mid-1960s, the Soviet Union was a complex industrialized society with an intricate division of labor and with complex interconnection of industries over a huge geographical expanse that had reached military parity with the Western powers.
When the First Five-Year Plan drafted by GOSPLAN established centralized planning as the basis of economic decision-making, the Soviet Union was still largely an agrarian nation lacking the complexities of a highly industrialized one. Thus, its goals, namely augmenting the country's industrial base, were those of extensive growth or the mobilization of resources. At a high human cost, due in large party to prison labor, and the effective militarization of factories, the Soviet Union forged a modern, highly industrialized economy more rapidly than any other nation beforehand.
Under Brezhnev's tutelage, the Soviet economy still had not yet exhausted its capacity for growth. The Soviet Union improved living standards by doubling urban wages and raising rural wages by around 75%, building millions of one-family apartments, and manufacturing large quantities of consumer goods and home appliances.
Industrial output also increased by 75%, and the Soviet Union became the world's largest producer of oil and steel. The twenty years following Stalin's death in 1953 were the best period in the history of Russia for the ordinary citizen in terms of rising living standards, stability, and peace.
Terror, famines, and world war were largely horrific memories while the tide of history appeared to be turning in favor of the Soviet Union. The United States was mired in economic recession resulting from the OPEC oil embargo, inflation caused by excessive government expenditures for the Vietnam War, and not to mention the wartime quagmire. Meanwhile, pro-Soviet regimes were making great strives abroad, especially in the Third World. Vietnam had defeated the United States, becoming a united, independent state under a Communist government while other Communist governments and pro-Soviet insurgencies were spreading rapidly across Africa, Southeast Asia, and Latin America.
Problems of the administrative command economy
During late Brezhnev years, however, the economy began to stagnate and the population increasingly began demanding greater quantities of consumer goods.
In the postwar years, the Soviet economy entered into a period of intensive growth (based on productivity improvements), with a new set of challenges from those of the extensive growth (mobilization of capital and labor) of the Stalinist era.
As the Soviet economy grew more complex, it required more and more complex disaggregation of control figures (plan targets) and factory inputs. As it required more communication between the enterprises and the planning ministries, and as the number of enterprises, trusts, and ministries multiplied, the Soviet economy started stagnating. The Soviet economy was increasingly sluggish when came to responding to change; adapting cost-saving technologies; and providing incentives at all levels to improve growth, productivity and efficiency.
At the enterprise level, managers were often more preoccupied with institutional careerism than with improving productivity. They received fixed wages and only received incentives for plan fulfillment on the basis of job security, bonuses, and benefits like special clinics and private dachas. Managers received such benefits when targets were over-fulfilled, but when, for instance, they were greatly over-fulfilled, they only saw their control figures increased.
Hence, there was an incentive to exceed targets, but not by much. Enterprises often understated capacity in order to bargain for more advantageous plan targets or control figures with the ministries (targets that, of course, would be easier to implement).
Planning was also very rigid; plant managers were not able to deviate from the plan and were allocated certain funds for certain capital and labor inputs. As a result, plant managers could not improve productivity by laying-off unnecessary workers due to such labor controls. There was substantial underemployment due to controls in plans drafted during collective bargaining between enterprises and ministries.
At the enterprise level, incentives were lacking for the application of price-saving technology. Planners would often reward consumers with lower administratively-set prices, rather than rewarding the enterprise for its productivity gains. In other words, technological innovation would often fail to make the industry more profitable for those who had a stake in it.
The Khrushchev and Brezhnev years saw concessions to consumers: wages for workers were relatively high, while prices were kept down at artificially-low administratively-set levels. Yet, income levels rose far more rapidly than price levels, despite slow productivity gains. As a result, supply shortages were increasingly common.
The Cold War was another drain the consumer economy. With a far smaller economy than the US, the Soviets faced a uneven burden in the arms race, forcing the country to devote a far higher share of their society's resources to the defense sector.
Calls for reform
Leonid Brezhnev
As the political atmosphere gradually moved toward becoming more relaxed since de-Stalinization, a reform movement high up party ranks was still able to survive the ouster of Khrushchev in 1964.
Most remarkably, the market-oriented reforms 1965, based on the ideas of Soviet economist Evsei Liberman, and backed by Soviet Prime Minister Aleksei Kosygin, were a attempt to revamp the economic system and cope with problems increasingly evident at the enterprise level. The Kosygin reforms called for giving industrial enterprises more control over their own production-mix and some flexibility over wages. Moreover, they sought to turn the enterprises' economic objectives toward making a profit, allowing them to put a proportion of profit into their own funds.
Until the late 1960s the Soviet Union was still sustaining higher rates of growth than the Western powers. With this in mind, some Soviet and Russia specialists have argued that the Kosygin Reforms of 1965 - not Gorbachev's reforms in the 1980s - were the last chance to for the leadership to Soviet administrative command economy and spare the population of the hardships of the past twenty years.
However, the style of the new leadership posed some problems for its own reform policies. The collective leadership sought to reconcile the interests of many different sectors of the state, party, and economic bureaucracy. As a result, the planning ministries and the military - the sectors most threatened Kosygin reforms - were able to obstruct efforts for reform considerably.
Fearing a move away from detailed central planning and control from above, the planning ministries - whose numbers were proliferating rapidly - fought back and protected their old powers. The ministries controlled supplies and rewarded performance, and were thus a formidable element of Soviet society. To maintain their grip over industry, planners started issuing more detailed instructions that retarded the reforms, impeding the freedom of action of the enterprises.
Kosygin, meanwhile, lacked the strength and the support to counteract their influence. Since these reforms were aimed at increasing productivity by pushing aside surplus labor, support from workers was minimal. Although enterprise management stood to gain the most from the reforms, their support was lukewarm, given their fears that the reforms would eventually falter.
Finally, by 1968, there was the unfortunate example of the Prague Spring in Czechoslovakia. By the early 1970s, the party's power vis-à-vis the economic bureaucracy and the military was weakening considerably. Momentum for economic and political reform stalled considerably until the rise of Mikhail Gorbachev in the mid-1980s.
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Referenced By
Collapse of the Soviet Union | History of Russia and the Soviet Union (1917-1927) | History of the Soviet Union | History of the Soviet Union: Part I | History of the Soviet Union (1917-1927) | History of the Soviet Union (1927-1953) | History of the Soviet Union (1985-1991) | History of the USSR
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