Why did the Soviet Union really collapse?

[Miss Valeska]

I know Socialism doesn't work, But, That answer doesn't sadisfy me. I heard it was mostly caused by Peteroskia, But, That doesn't make sense to me. I heard it caused greater nationalism in the componet Republics, But, That doesn't make sense to me. The Soviet Union becomes freer, So, You become nationalistic to your little Republic? Wouldn't that make you like the Soviet Union more? I've heard it was related to Afganistan, But, I don't know how valid that is, And why they wouldn't just pull out of the war. Please help

[masonman]

Have you watched this? Its got some info on the subject.

 

[View:http://www.youtube.com/watch?v=17iAint-_pc]

[Alan C.]

I know Socialism doesn't work, But, That answer doesn't sadisfy me.

The answer is that they did not have private property which resulted in a lack of market prices to coordinate production.

Central planning is fatally flawed because it lacks information which can be attained only through market prices. A price is not an arbitrary number that somebody decrees by fiat; it must reflect something real and meaningful in the market or the result is discoordination and malinvestment.

Also watch this:

[view:http://www.youtube.com/watch?v=b7zzH8ruLDc:640:390]

[Miss Valeska]

Yeah, I mean, I know that, But, What specifically columinated to cause the collapse?

[masonman]

From what I understand, its how most countries "collapse." The government, as a result of their dismal economic policies, becomes so weak that the poor and oppressed people find themselves in a position to begin protesting, rioting, and eventually overpowering the government and bringing about collapse.

[Dave Bockman]

 

Yeah, I mean, I know that, But, What specifically columinated to cause the collapse?

 

My understanding of the events leads me to believe that the Soviet economy, being in exceedingly rough shape, began to recover and grow under Mikhail Gorbachev's 'glasnost' policies. This small loosening of the iron grip of tyranny resulted in internal strife as various ethnic minorities and oppressed former countries began vying for the 'power vacuum' they perceived. Of course everyone remembers

This was a direct result of the Gorbachev regime's 'openness' policies. It became a downward spiral (or upward, sort of). Each lessening of restriction resulted in new nationalistic demands giving power back to the original seats of power.

[Miss Valeska]

This is bizzare though, After World War 1, The Soviet Economy was also in shambles, And all they did was a brief peroid of a few years of a sort of "state capitalism" so it was called. A brief period of freer economic policies which revived the economy, Why didn't they just make a habit of insituting these policies every couple decades to revive the economy? Why did they do the peteroskia and glasnost stuff? http://en.wikipedia.org/wiki/New_Economic_Policy Also, I don't understand why any Government would chose to dissolve itself, It just doesn't make sense to me. Wouldn't it be better for the rulers to hold on until the peasents are literally breaking down their doors?

[Dave Bockman]

There was nothing left to be stolen. The cows were milked dry. Sensing the impending collapse, Politburo members and military leaders filled their private bank accounts. It's like the Titanic sinking... slow at first but then speeding up as more and more Party members scramble for the remaining scraps of stolen money.

[Existing Alternatives]

 

Also, I don't understand why any Government would chose to dissolve itself, It just doesn't make sense to me. Wouldn't it be better for the rulers to hold on until the peasents are literally breaking down their doors?

 

They run out of money. During 70s Soviet Union was able to cash in on the embargos and high oil prices by pumping tonnes of oil to the west. Eventually those “eurodollars” dried up. A lot of apparatchiks at the top started seeing the impending doom, started syphoning as much funds (gold, foreign currency, what have you) out of the country, thus accelerating the process. Gorbachev’s relative liberalisation was the last ditch attempt to stimulate the economy, but it was too little too late. At the same time, as Soviet Union was not able to support their satellites (both internal and external), their grip slipped and they started to pull away, first Germany (the most financially dependent of the Pact members), then Poland, CSSR, followed by Baltics and the rest. They did not “choose” to dissolve, they imploded. As soon as the financial aid stopped flowing and the military was being withdrawn there was nothing to hold the empire together.

Afghanistan was actually secondary here. Yes, it was a war they could no longer afford. But, yes they did eventually pull out.

 

This is bizzare though, After World War 1, The Soviet Economy was also in shambles, And all they did was a brief peroid of a few years of a sort of "state capitalism" so it was called. A brief period of freer economic policies which revived the economy, Why didn't they just make a habit of insituting these policies every couple decades to revive the economy? Why did they do the peteroskia and glasnost stuff? http://en.wikipedia.org/wiki/New_Economic_Policy

 

New Economic Policy was implemented in almost opposite situation: the economy was already in shambles and there was still lots of propaganda to be leveraged. In the ‘80s the economy was beginning to deteriorate after an extended period of relative prosperity, and nobody cared anymore about the “brighter tomorrow.”

 

[Miss Valeska]

Hmm, Why didn't they care? They had been indoctrinated, and propagandised for decades! It was an entire Communist Union, In an entire communist world with everything else blocked out for so long. I don't understand why they stopped caring, Especially if it was prosperious prior. I still don't understand why the satalites started to pull away, Can you elaborate on that some more? Is there any possible way the Soviet Union could have survived till now? Is there any possible way it could have recovered like it did early on? I would think they would just have an endless cycle of, Socialism, Temporary prosperity, Depressions, Economic Liberalisation, Recovery, And so on. Unless, Of course, People figured out it was just an endless cycle, And the lie about "pure communism" was never going to happen.

[Existing Alternatives]

 

Hmm, Why didn't they care? They had been indoctrinated, and propagandised for decades! It was an entire Communist Union, In an entire communist world with everything else blocked out for so long. I don't understand why they stopped caring, Especially if it was prosperious prior.

Here is my theory: the history of Bolshevik Russia / Soviet Union can probably be broken into the following periods:

-          1917-1922 Revolution, Civil War, early expansion. Complete destruction of the economy, anti-Czarist propaganda at its highest. Rock bottom – only up from here. Hence, the state blossoms

-          1922-1928 New Economic Policy. Relative economic liberalization -> ensuing prosperity. “This thing actually works” mentality.

-          1930s The Purge.  Prosperity extracted from the previously built economic framework (NEP), the first five-year plan marks the beginning of planned economy. Everything that’s wrong is blamed on the “Enemies of the State.” Peak of personality cult. “We are still moving forward despite the efforts of imperialistic spies.”

-          1940s The War. Radical Industrialisation for the war effort actually causes an increase in productivity and prosperity (Red Army started the war with cavalry and ended it with ground-to-ground missiles). “Communist paradise is just around the corner.”

-          1950s The Reconstruction. Earlier industrialization is heavily leveraged for grand projects: dams, rail roads, super-factories, apartment blocks, etc. Death of Stalin causes many cases of the Purge to become public. “So, Stalin was wrong in some areas (still a great leader), now all we need is a small adjustment to get there.”

-          1960s The Corn Decade. Relative openness with the US (caused by the threat mutual nuclear destruction) results in adoption of progressive agricultural processes, which significantly increase food production.

-          1970s Oil. Instability in the Middle East causes the oil prices to skyrocket. Soviet Union, the only major oil producer that is not bound by OPEC’s restriction, handily capitalizes on it. Gigantic pipelines are built straight from the oil wells to consumers in Europe, easy cash flow right back. Relative prosperity all but replaces the need for propaganda.

-          1980s Zastoy (stagnation). Literally nothing’s happening. Oil prices stabilize – excessive revenues dry up. No significant technological changes. Populace spirits decline. Alcoholism rampages. “They pretend to pay us, we pretend to work” is the mantra of the day. Big bet that an easy win in a war (Afghanistan) should spruce things up fails miserably.

-          1990s The End. Early relative economic and political liberalization backfires and accelerates the demise.

So, my theory is that Communists simply ran out of things to either grow the economy or distract the populace with. Maybe if the war was successful (or at least better framed) or another economic leap would occur things would go back into the cycle.

[Existing Alternatives]

 

I still don't understand why the satalites started to pull away, Can you elaborate on that some more?

The satellites question, in my mind, is easy. They only survived as long as Soviet Union propped up (or outright funded) their economies and provided the troops and weaponry to keep the people from uprising.

Closer the country was to the enemy lines, more support it would receive. The best example would be Cuba, from which SU was exporting tonnes of sugar. Keep in mind that SU produces its own sugar from beats, which is relatively cheap and requires little transportation. Now take a look at the map and imagine what additional cost it would take to ship cane sugar from Cuba. I read somewhere an estimate of 7x the cost of local production.

The best examples of the military “support” would be Hungary in 1956 and Czechoslovakia in 1968.  

Once Soviet Union could not afford to subsidize their economies and station their troops, the game was over.

[Miss Valeska]

Okay, Thank you so much for posting as much as you have, Now I have two more questions. One, Why weren't they so patriotic and indoctrinated that they believed in it regardless of the economic situation as it is in the U.S? And why did Perestrikia and Glanost fail, And backfire?

[Miss Valeska]

Hmm, Why did they have to supply their satalites with everything? Did England do this with theirs?

[pretzelogik]

The Soviet Union did not arise organically, but was heavily funded and influenced, if not managed by western powers from the outset.  It was continually supplied with technology and economically subsidized by the west.

It may be instructive to look at Gary Allen's definition of communism:

AN
INTERNATIONAL, CONSPIRATORIAL DRIVE FOR POWER ON THE PART OF MEN IN HIGH PLACES
WILLING TO USE ANY MEANS TO BRING ABOUT THEIR DESIRED AIM - GLOBAL CONQUEST

Perhaps the cold war mythology was growing stale and a new threat was needed to continue the maintenance and expansion of the military/police state so the red menace was retired.  When I was growing up Kruschev, Brezhnev and the like were constantly in the news and we were instructed in school on how to survive a nuclear blast.  Tension over imminent nuclear annihilation was constant and the political leaders were portrayed as having nervous, twitchy fingers poised over the red buttons of doom.

Why did that subside?  Boredom and fatigue most likely.  Russia was simply written out of the script to be replaced by the Muslim menace.  The west withdrew funding, the Russian leaders cleared the shelves and skedaddled as mentioned above and the way was made clear for the next band of violent thugs to fill the void.

Of course,  there will always be money for the space station, so we can see how people brush their teeth in zero gravity.

[Existing Alternatives]

 

 Why weren't they so patriotic and indoctrinated that they believed in it regardless of the economic situation as it is in the U.S?

Does propaganda have an expiry date? I think eventually it wears out – you can only demand and receive sacrifices for so long, unless you constantly feed propaganda with proof that it works or constantly distract the populace with wars and such. At the outset there was proof (things were improving), then there was war, after that things were improving again, next round of distraction (aka Afghanistan) failed and the house of cards came down.

Keep in mind that only the system and the actual structure of the country collapsed. All the internal workings remained the same. Ok, it is Russia now, Communism is reduced to a second class political party and people are not “guaranteed” work or income anymore. At the same time, the leadership / bureaucracy remained virtually unchanged – some old Soviet ministries are still in exact same shape and place employing same (albeit younger) bureaucrats. Look at KGB for example – all they did was re-brand it to FSB and that’s pretty much it. Many “red” directors now own the factories they used to run. Vast proportion of population is employed at exactly the same factories and institutions they were before. Effectively, all it was a reset button for the top to upgrade the extracting mechanisms.

 

And why did Perestrikia and Glanost fail, And backfire?

 

I think they did backfire. Thanks to Glasnost people learned of many horrors that Communism represented and Perestroika put some property into the hands of producers. So, suddenly people can no longer remain ignorant, and they have something to worry about.

[Existing Alternatives]

 

Hmm, Why did they have to supply their satalites with everything? Did England do this with theirs?

 

I’m not sure why Soviet Union maintained its network of satellites. But it seems that money and soldiers were the only way to keep them together. They did sell it to their own people as "the spread of Communism all over the globe", which demanded ever more sacrifices.

England perhaps is different because, at least they extracted some kind of material benefit from their colonies. Although an interesting case would be for Falklands. US seem to maintain a similar structure today with foreign aid, propped-up dictators and military bases. Perhaps that’s what empires do.

[Existing Alternatives]

 

 Why weren't they so patriotic and indoctrinated that they believed in it regardless of the economic situation as it is in the U.S?

 

A Quick add specifically re: US…

If my logic holds water, then it is way too early for American patriotism to start showing any signs of deterioration.  First, the economic situation is not drastically worse than before - a mere decline in housing prices would not equal bread lines. Secondly, US distraction policy is quite successful: they keep on switching focus from specific countries, to tragic events, to generic partisan bickering, to seemingly never ending election cycle – there is no time to stop and think for common citizenry.

[Miss Valeska]

Hmmm, I don't understand though, Why didn't the Soviet Union do the same thing? Also, Why does the U.S go to war so much? Don't they know it will kill them? It wastes a massive amount of money, And kills millions of people, Including their own soldiers, And all they get is some extra patriotism, And then, Eventually, They anti-war movement grows again.

[PatrickC]

Not up much on Soviet history, but I have some thoughts about why the US enter so many wars, at least the recent ones in the Middle East. It is primarilly all about protecting the dollar.

 

I believe that there are more dollars buying oil (petrodollars) than in the entire domestic US economy. The Middle east is where most of the dollar transactions take place as the world buys its oil. However, some of these Middle Eastern countries have been attempting to use different currencies to buy oil, such as Iraq, Libya and Iran. This may include Syria, although I'm not so sure.

 

That petrodollar market almost single handedly allows the Fed to keep the printing presses on 24/7. If that market were to fall into the hands of other currencies, then it's likely they would have to switch off those presses or risk hyper inflation.

 

There is probably a lot more detail I've missed out, but that's the long and the short of it.

[LaissezFaire]

A points of fact: We should not make the mistake of saying that Mises 'predicted the collapse of the Soviet Union'. The collapse of true socialism as described in Mises' works would happen almost instantaneously, not 70 years later.The Soviet Socialist Republics were not socialist in the economic sense. They had an extensive black market and some legal property and transfer rights. The Soviet Union was a hampered market economy. The closest it came to socialism, in the economic sense, was during War Communism, which was quickly abandoned to prevent a collapse of the Soviet Union at its birth.

 

The Soviet Union 'collapsed' for a large number of reasons (history tends to be overdetermined). The negative impact on its economic, technical and human infrastructure was leaving a smaller-and-smaller clique able to be beneficiary of the extortion policies. The system was based, even in its later years, on the threat of police or at least economic sanctions by the State. I think Yuri Maltsev's explanation may be one of the major causes: when the pressure of police power was relieved, the Soviet Union had to disintegrate. That's had become the sole basis of its continued public legitimacy.

[Existing Alternatives]

Hmmm, I don't understand though, Why didn't the Soviet Union do the same thing? Also, Why does the U.S go to war so much? Don't they know it will kill them? It wastes a massive amount of money, And kills millions of people, Including their own soldiers, And all they get is some extra patriotism, And then, Eventually, They anti-war movement grows again.

 

Nobody cared for Soviet rubles by the end of the 80s, but people still care for US dollar. So, Soviets simply could not afford any more wars, whereas Americans can keep on borrowing (until China says “No”).

 

Btw, to be clear, wars don’t “waste” money, but rather “transfer” them from society in general to companies that supply the war effort. In one of the recent podcasts (on Syria) Stefan pointed out that the vast majority of jobs created in the US over the last couple of year were in the “defense” industry, when the rest of the economy actually bled jobs.

[Wesley]

Btw, to be clear, wars don’t “waste” money, but rather “transfer” them from society in general to companies that supply the war effort. In one of the recent podcasts (on Syria) Stefan pointed out that the vast majority of jobs created in the US over the last couple of year were in the “defense” industry, when the rest of the economy actually bled jobs.

There also is a distinct wasting of money. If I build a bomb and then blow it up, something is wasted. If it was a transfer, then the wrong thing is built, but someone can use it for something. If you build something to be blown up, it seems to me like an actual waste of resources.

[Existing Alternatives]

There also is a distinct wasting of money. If I build a bomb and then blow it up, something is wasted. If it was a transfer, then the wrong thing is built, but someone can use it for something. If you build something to be blown up, it seems to me like an actual waste of resources.

 

Resources - yes, money - no. If you pay me money to break my bike, the bike is gone and it may seem like a waste of money to you, but in reality you just made me a little bit richer.

[Wesley]

Resources - yes, money - no. If you pay me money to break my bike, the bike is gone and it may seem like a waste of money to you, but in reality you just made me a little bit richer.

Well I will also say that destroying resources while adding money creates faster inflation. However, yes I get what is going on now. They do not care about the country as a whole, they care about their personal increase in money. Which war destitute a nation, while making a few people very rich.

 

There are a handful of people who would take the deal of destroying 10 peoples lives while giving himself a fat check. Then do it again and again. They tend to work in the war industry, or maybe politics.

[Miss Valeska]

Okay, Thank you so much! I understand so much more about this now! However, I think I would consider the Soviet Union socialist though. Especially because, The black market is not legal, While it would support the Ruble, It wouldn't change the nature of the Government, Or economy at large. Which was socialist, It was just socialism with a looooottttt of heroin.

 

My question is though, Now, Why did anyone care about the Ruble at all, and why did they stop caring? Also, Why was the Soviet Union so specifically fascistic and insane? (Homosexuality was outlawed, There were work camps, Concentration camps, Gulags, Etc.) Why? Hmm, I do know almost every "President" or "Supreme Soviet" was born before the revolution, Except for Gorbachev. But, Why would the people support their insanity? (Now I'm thinking of making a thread about the fire works that was Nazi germany, As in, Loud, Scary, Painful, And short.)

[Existing Alternatives]

I think the broader question should be, why people in general support violence?

 

Soviet people were convinced that evil capitalists were out to ruin their workers’ paradise and they would fight for it tooth and nail. Lots of propaganda and brainwashing will do that kind of thing. Remember that first thing Soviets did was to uproot any form of intelligentsia (“uproot” in most cases meant “kill”), replacing it with their own close-minded educational structure. Publishing was only done by government and the borders were shut and radio-signals jammed, so no information ever got in. It is irrelevant when the leader were born, they just saw this structure as the means of personal enrichment.

 

To a lesser extent same worked in Nazi Germany. Most Americans today know very little about what’s going on in the world, but are frightened by anything foreign and are willing to fight if anything is perceived to violate their status quo.

[PatrickC]

Yes, the soviets were the best propagandists and not just in their own country, but also abroad as they encouraged cultural Marxism throughout the western world. The rouble may have died, but not the rhetoric.

[wdiaz03]

I'm thinking the USSR Tax farm didn't collapsed it was just re branded and is now under new management.

[Mike Fleming]

I'm thinking the USSR Tax farm didn't collapsed it was just re branded and is now under new management.

 

Kind of like when a company collapses but other companies come in to take control of the assets.  The assets in this case being the former people's of the Soviet Union tax farm who are now distributed across a range of new tax farms.  Collapse didn't lead to freedom in this case.

 

The problem with my analogy above is of course that people are assumed to be property.

[wdiaz03]

Kind of like when a company collapses but other companies come in to take control of the assets.  The assets in this case being the former people's of the Soviet Union tax farm who are now distributed across a range of new tax farms.  Collapse didn't lead to freedom in this case.

 

The problem with my analogy above is of course that people are assumed to be property.

Yup, But do we even know if those in power behind the scenes were really replaced? Or was it more like the board of directors picked a new CEO and CFO?

[Mike Fleming]

Well, I see it as the younger members of the existing power structure who saw that it wasn't viable anymore and restructured and slightly decentralized things to make them more economically viable.  The older members complained and even attempted a coup but eventually were pushed aside.  Just smarter, younger thugs replacing older thugs really.   Just like what happens in the mafia.

[OBBNNOXIO]

Actually no the Soviet Union did not collapse. The Marxist economic model collapsed. They changed the name of the country to Russia after the long awaited economic failure. They took massive handouts from western countries and are in the same economic situation as China (on a much smaller scale).

 

The communist economies are partly free (Russia China etc.). They can't survive any other way because of the total failure of centrally controlled economies.

 

The political power never changed hands. The ideals never changed either. The economic ideals are all that changed.

 

In a Nutshell:

 

• The communists loosened the economic freedoms within the 2 countries (China and Russia - Late 80's early 90's even China was on the brink)
• The west tightened up economic freedoms (hence where we are now)
• Eastern communist countries and western countries are now meeting somewhere in the middle
• This is planned and propagated by the cooperation of dozens of Western Socialist organizations; Trilateral Commission, Council on Foreign Affairs, Bilderberg Group etc (lets not forget how well funded and politically powerful these socialist organization are)

Without western financial support to prop up China and Russia's economies in the early 90's they would've collapsed yes. However as we see now within our own countries bail outs are a socialist mechanism to save failed systems.

 

They were to big to fail!

[AccuTron]

I have no idea where I saw this link some months ago, but it was a brief clip from an older looking video interview with Gorbachev, speaking in Russian, subtitled in English.  His remark was something like "Everyone knows it was Chernobyl that collapsed the Soviet Union." I have no other context, and assume the subtitle was legit.  I assume that everything else mentioned here also collapsed the USSR, and maybe Chernobyl was the very large log that broke the camel's back.  It will be sadly interesting to see what Fukushima ultimately does to Japan.

[OBBNNOXIO]

Actually the socialist economic model crushed the USSR...they ran out of money!