war with napoleon  |  decembrists  |  revolution  |  second world war  |  soviet era  |  perestroika    

Cover of the book - What Went Wrong With Perestroika, by Marshall I. Goldman.Dramatic and confusing changes in what used to be the Soviet Union have transformed the world in which we live.

ussia's economic situation has deteriorated since the beginning of Gorbachev's Perestroyka, which announced moving from centrally planned economy to a market economy.

The absence of a clear economical doctrine and means led to destruction of internal economical structure and declining of industries.

Moscow, Western advertisement below Lenin memorial.In its turn, it led to significant raise of unemployment, with unofficial estimates about 9-10%. Russian health and education systems, which used to be of the highest standard during the Soviet times, were slowly deteriorating. Inflation, started in 1992, reached its peak in 1994, and increased 10 000% by the end of 1997. In 1998 the government implemented a 1000% denomination of national currency (Ruble), turned back prices from thousands rubles to rubles.

he Soviet Union had a planned socialist economy, in which the central government controlled everything from production planning and prices to distribution. The Soviet satellite states in Eastern Europe had planned economies as well. After the breakup of the USSR, Russian reformers were confronted with the daunting task of building a modern capitalist economy while simultaneously striving to create a democratic state based on effective laws and reliable administrative structures. The collapse of Communism in Eastern Europe in the late 1980s and the dissolution of the Soviet Union at the end of 1991 disrupted the close economic relations Russia had previously enjoyed with neighboring Communist states and other Soviet republics.

Russian Duma.Political turmoil and uncertainty inside the Russian government also contributed to the country’s economic woes. Compared with most of the former planned economies of Eastern Europe, Russia experienced an unusually severe and protracted drop in officially reported economic output.

omestic policy in the Gorbachev era was conducted primarily under three programs, whose names became household words: perestroika (rebuilding), glasnost (public voicing), and demokratizatsiya (democratization). The first of these was applied primarily to the economy, but it was meant to refer to society in general. Over the course of Soviet rule, society in the Soviet Union had grown more urbanized, better educated, and more complex. Old methods of exhortation and coercion were inappropriate, yet Brezhnev's government had denied change rather than mastered it. Despite Andropov's efforts to reintroduce some measure of discipline, the communist superpower remained stagnant. Once Gorbachev began to call for bolder reforms, the "acceleration" gave way to perestroika.

Russian Duma.From modest beginnings at the Twenty-Seventh Party Congress in 1986, perestroika, Mikhail Gorbachev's program of economic, political, and social restructuring, became the unintended catalyst for dismantling what had taken nearly three-quarters of a century to erect: the Marxist-Leninist-Stalinist totalitarian state.

The world watched in disbelief but with growing admiration as Soviet forces withdrew from Afghanistan, democratic governments overturned Communist regimes in Eastern Europe, Germany was reunited, the Warsaw Pact withered away, and the Cold War came to an abrupt end.

In the Soviet Union itself, however, reactions to the new policies were mixed. Reform policies rocked the foundation of entrenched traditional power bases in the party, economy, and society but did not replace them entirely. Newfound freedoms of assembly, speech, and religion, the right to strike, and multicandidate elections undermined not only the Soviet Union's authoritarian structures, but also the familiar sense of order and predictability. Long-suppressed, bitter inter-ethnic, economic, and social grievances led to clashes, strikes, and growing crime rates.

Gorbachev introduced policies designed to begin establishing a market economy by encouraging limited private ownership and profitability in Soviet industry and agriculture. But the Communist control system and over-centralization of power and privilege were maintained and new policies produced no economic miracles. Instead, lines got longer for scarce goods in the stores, civic unrest mounted, and bloody crackdowns claimed lives, particularly in the restive nationalist populations of the outlying Caucasus and Baltic states.

On August 19, 1991, conservative elements in Gorbachev's own administration launched an abortive coup to prevent the signing of a new union treaty the following day and to restore the party's power and authority. Boris Yeltsin, who had become Russia's first popularly elected president in June 1991, made the seat of government of his Russian republic, known as the White House, the rallying point for resistance to the organizers of the coup. Under his leadership, Russia embarked on even more far - reaching reforms as the Soviet Union broke up into its constituent republics and formed the Commonwealth of Independent States.

Cover of the book. M. Gorbachev.

Mikchail Gorbachev.Radical Reforms

On 11 March 1985, 54-year-old Mikhail Gorbachev was elected the new general secretary of the Communist Party. Following in the footsteps of such past rulers as Ivan the Terrible, Peter the Great, Stalin, and Brezhnev, Gorbachev inherited a stagnating economy, an entrenched bureaucracy, and a population that had lived in fear and mistrust of their previous leaders. Gorbachev's first actions were to shut down the production and sale of vodka and to ardently pursue Andropov's anticorruption campaign; one of the first to go was Leningrad party boss Grigory Romanov.

In 1986, when Gorbachev introduced the radical reform policies of perestroika (restructuring), he emphasized that past reforms hadn't worked because they didn't stress the "involvement of the people in modernizing and restructuring the country." Perestroika implemented more profit motives, quality controls, private ownership in agriculture, decentralization, and multicandidate elections. Industry concentrated on measures promoting quality over quantity; private businesses and cooperatives were encouraged; farmers and individuals could now lease land and housing from the government and keep the profits made from selling produce grown on private plots: hundreds of ministries and bureaucratic centers were disbanded. A law was passed that allowed individuals to own small businesses and hire workers as long as there was "no exploitation of man by man." In the campaign for demokratizatsiya, open elections were held. Glasnost let truths surface from the Stalin and Brezhnev years.

As Peter the Great had understood, modernization meant Westernization, and Gorbachev reopened the window to the West. With the fostering of private business, about five million people were employed by over 150,000 cooperatives. After 1 April 1989, all enterprises were allowed to carry on trade relations with foreign partners. This triggered the development of joint ventures. Multimillion dollar deals were established with Western companies such as Chevron, PepsiCo, Eastman-Kodak, McDonnell's, Time-Warner, and Occidental Petroleum.

At the 1986 Iceland Summit, Gorbachev proposed to sharply reduce the Soviet stockpile of ballistic missiles. In December 1987, Gorbachev and US President Ronald Regain signed a treaty at the Washington Summit to eliminate intermediate nuclear missiles. "I do think the winter of mistrust is over," declared Premier Nikolai Ryzhkov.

During a visit to Finland in October 1989, Gorbachev declared that "the Soviet Union has no moral or political right to interfere in the affairs of its East European neighbors. They have the right to decide their own fate." By the end of 1989, every country throughout Eastern Europe saw its people protesting openly for mass reforms; not in this century had there been such sweeping political change. The Iron Curtain crumbled, symbolized most poignantly by the demolishing of the wall between East and West Berlin.

In December 1989, Gorbachev met with US President George Bush at the Malta Summit, where the two agreed that "the arms race, mistrust, psychological and ideological struggle should all be things of the past."

Article about Perestroika, article "Gorbachev and Perestroika".

war with napoleon  |  decembrists  |  revolution  |  second world war  |  soviet era  |  perestroika

Site Produced by --- Contact --- Disclaimer --- Last updated in April 2003.