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Vanity - What were the economic reasons for the Soviet Collapse?

Posted on 10/14/2010 8:59:16 PM PDT by tired1

Aside from the obviuous shortcommings of central planning, I'm interested in the circumdtances which caused the USSR to implode. Was it inability to meet foreign obligations?

Would appreciate opioions and any sources.


TOPICS: Business/Economy; History; Politics
KEYWORDS: ciakgb; collapse; communism; history; reagan; soviet; soviets; sovietunion; ussr
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To: tired1
Workers, productive workers saw little connection between production and reward. ( There were incentives, right from the beginning with Lenin and right through the end. The state did reward, but it was central planning rewarding, which suffers from what is called the Knowledge Problem. The well educated elites didn't, and could never, have enough knowledge to deliver rewards to the factory floor. When they delegated the gift giving, it was taken by intermediate graf/management. There is no way around this command economy problem. Hitler, the Soviets, Mao, even the Mafia and even the Army and General Motors all suffer from this command, large organizational problem.)

Some lectures on the Soviet Union from an economic view. Click on the one that seems most general/easiest first.

61 posted on 10/14/2010 10:16:46 PM PDT by Leisler ("Over time they create a legal system that plunders and a moral code that glorifies it." F. Bastiat)
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To: miele man

bump for later read


62 posted on 10/14/2010 10:17:15 PM PDT by miele man
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To: tired1

Two big props to the Soviet economy were oil and gold. Much of their foreign exchange came from these two sources. Under Reagan, private gold ownership was restored which brought a flood of gold purchases, especially South African Krugerrands. Then, the Saudis agreed to increase oil production. The result-both commodities tanked in price, undercutting the Soviet economy and stimulating ours.

It didn’t help either that we effectively made China an ally at the same time. The American connection enabled the Chicoms to build up both their military and their economy, both of which at the time were in a rudimentary state. All the while, taxing the capabilities of their neighbor.


63 posted on 10/14/2010 10:18:31 PM PDT by tanuki (Obamacare, Cap and Tax, Amnesty, in that order....)
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To: Errant

Where’s the costal elite? Those are Texans and a working class Greek? Where are the Harvard/Yale types? ( Oh, I forgot, having long lunches at the CIA )


64 posted on 10/14/2010 10:19:47 PM PDT by Leisler ("Over time they create a legal system that plunders and a moral code that glorifies it." F. Bastiat)
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To: Leisler

Also, your reward for exceeding a production quota was an increase in the quota and possibly a shiny Hero of Socialist Labour medal.


65 posted on 10/14/2010 10:21:35 PM PDT by Army Air Corps (Four fried chickens and a coke)
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To: tanuki
Yes, and the latter exacerbated long standing Sino-Soviet tensions.
66 posted on 10/14/2010 10:23:34 PM PDT by Army Air Corps (Four fried chickens and a coke)
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To: oyez

Internally, those expenditure were thought of as ‘investments’. Just like in the US, Public Housing projects, High Speed Rail, Stimulus Debt, is thought of as investments. Basically, central planning is economics for losers. Something to do until the collapse.


67 posted on 10/14/2010 10:26:00 PM PDT by Leisler ("Over time they create a legal system that plunders and a moral code that glorifies it." F. Bastiat)
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To: Army Air Corps
Which brings around the next question, “What was the beginning of the collapse of CBS News and who was the person that initiated it?
68 posted on 10/14/2010 10:27:54 PM PDT by oyez (The difference in genius and stupidity is that genius has limits.)
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To: One Name

I really couldn’t say. I thought the ‘08 election would be between Hillary Clinton and Newt Gingrich.

This is the first time I’ve felt we were in the fight in the last 22 years though, and she has never been to the Bohemian Grove.


69 posted on 10/14/2010 10:28:44 PM PDT by Psalm 144
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To: Army Air Corps

Production quotas were often exceeded. Now if you actually wanted to walk in those plastic shoes, or eat those cans of ‘People’s Caned Meet Products. Factory 298’, is another thing.

Much like our People’s Schools products. All graduate and have certificates to prove it. Just don’t ask them to do any subtraction.


70 posted on 10/14/2010 10:30:23 PM PDT by Leisler ("Over time they create a legal system that plunders and a moral code that glorifies it." F. Bastiat)
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To: oyez

For my money, it would be Walter Cronkite and his duplicitous “reportage.” Gen. Giap said that the US media was a tremendous ally.


71 posted on 10/14/2010 10:30:27 PM PDT by Army Air Corps (Four fried chickens and a coke)
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To: One Name

Don’t know.


72 posted on 10/14/2010 10:31:37 PM PDT by Vendome (Don't take life so seriously... You'll never live through it.)
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To: Leisler

That reminds me of a quote from PJ O’Rouke - “Communism collapsed because no one wanted to wear Bulgarian shoes.”


73 posted on 10/14/2010 10:32:20 PM PDT by Army Air Corps (Four fried chickens and a coke)
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To: tired1

btt for later!


74 posted on 10/14/2010 10:33:42 PM PDT by Noob1999
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To: tired1

The ruble was inconvertable and they could have simply inflated as they had in the past. They could also have restructured foreign payments, as Russia subsequently

Well, all their satelite countrys around them rebelled and refused to cooperate as did most of the east bloc states, russia was unlikely to make it on it’s own without using Stalinistic methods, and they could probably not get away with that in the ninetis.


75 posted on 10/14/2010 10:35:54 PM PDT by munin (Enki did it, George Bush did it)
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To: tired1

PROMIS technology.

(Yes, it’s spelled that way!)

CA....


76 posted on 10/14/2010 10:37:32 PM PDT by Chances Are (Whew! Seems I've found that silly grin again!)
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To: Army Air Corps
Supposedly these ads caused a lot of female dissatisfaction( but, then again, what doesn't? )
77 posted on 10/14/2010 10:39:07 PM PDT by Leisler ("Over time they create a legal system that plunders and a moral code that glorifies it." F. Bastiat)
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To: tired1

The USSR had many weaknesses, but the most crucial tipping point came from our successful effort to drive down oil prices in the 1980s. The resulting collapse in hard-currency revenues ultimately bankrupted the inefficient empire. A detailed history of how that oil price management occurred is available in a book, “The Oil Card: Global Economic Warfare in the 21st Century.”

Ultimately, Gorbachev had to go hat in hand to borrow about $100 billion from Western governments to feed the Russian people in the final years of the 1980s. The strings attached to those loans and the treat of them being called due were a key factor in preventing Soviet troops from being sent in to crush the popular uprisings in Eastern Europe. Moscow lost control of its borders and ran out of money at the end of 1991.

The key question now: Are current high oil (and iron ore and bauxite) prices being managed upward to try and slow down the Chinese?


78 posted on 10/14/2010 10:40:18 PM PDT by Tenega
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To: Leisler

I remember that one and the one in which she is counting the stitches on her jeans.


79 posted on 10/14/2010 10:41:07 PM PDT by Army Air Corps (Four fried chickens and a coke)
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To: tired1

All of you are only partially correct.

Yes, bad economics is the background. All Communist systems become increasingly inefficient, and despite whatever tinkering (so-called planning) is done, it will not improve.

But - what brought the Soviets down (and nearly brought the Chicoms down in May-June of 1989) are divisions and power struggles within the party itself. After the strong-man (ie. Mao/Stalin) destroys any rule of law, power naturally becomes dispersed among the bureaucrats who battle each-other over economic policy, power, control over the military, etc... In fact, they probably hate each other more than the outside enemy.

George Kennan knew this when he proposed “Containment” after WWII, and Reagan understood that, Totalitarian Gov’ts are, in fact, very weak internally.


80 posted on 10/14/2010 10:42:30 PM PDT by PGR88
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