Skip to comments.Did an Oil Crisis Cause the Transition in the Soviet Union
Posted on 04/15/2006 4:04:50 AM PDT by wotan
Soviet Economic Decline:
Did an Oil Crisis Cause the Transition in the Soviet Union?
If Marxist-Leninist Communism was so inefficient, then why did it last in one form or another for over 70 years in Russia and the Soviet Union before it finally died. Did it last so long because inherently it provides a good economic system or did it last so long because inherently it was not as inefficient as we are made to believe, but that some other circumstances caused its demise? We believe the latter. The Soviet system was not spectacularly inefficient and was an adequate, though far below average, system for running an economy. As long as there were plenty of resources, the Soviet economy could continue running. However, rather like a gas-guzzling car, the planned economies became spectacularly inefficient in the face of resource scarcity, particularly oil scarcity. A planned economy is not flexible enough to reallocate quickly scarce resources that suddenly decline in production.
We believe it is no coincidence that Soviet oil production declined by 30% from 1988 to 1992, BP (1996), precisely during the time when the break up and capitalist transformation was occurring. Furthermore since 1992, Russian oil production has declined an additional 20% or more and during that time Russia's recession has worsened. Most analysts see cause and effect during the Soviet transition as being one of the transition of the economy causing the oil production decline. We however believe it is the opposite. It was the oil production decline that caused the final break down of the Soviet economy. The collapsing Soviet economy then caused the break up and political change of the Soviet System. Certainly, there were many factors that played a role in the fall of the Soviet Union.
(Excerpt) Read more at hubbertpeak.com ...
Smells like BS.
We believe it is no coincidence that Soviet oil production declined by 30% from 1988 to 1992, BP
Hello Clueless Wonders! When Reagan came into office, he correctly saw that the soviet System was essentially BANKRUPT and that the only way the Soviet Union was staying alive was by being a GIANT LEECH on the countries it dominated. Hence Reagan's brilliant strategic plan (implemented wonderfully by Casey) to give them a 'shove' and push them past the tipping point.
Come on guys. There was an oil reduction from 1988 to 1992 because the Soviet system was collapsing not the other way around. This is just another liberal trying desperately to find a way to blame something other than "it doesn't work" for the failure of socialism.
REAGAN caused the collapse (along with Americans serving in our Military and R&D complexes), and world leftists who are anti-American POS want to re-write History. No thanks!!! Some of us lived through it, and cannot be fed BULL$H!T about it!
Probably written by retired CIA analysts.
but!but!but! If only HILLARHEA!! the MOST brilliant woman in the world was running the USSR, It would be the pinnacle of cultural acheivement today!!BTW, isn't this all Bush's fault....
Communist, Socialist, Liberals are all LOSERS and they will blame anybody or anything but themselves for their downfalls. It is truly amazing to sit back and watch how arrogant stupidity rules their hearts and minds.
It lasted as long as it did because we (the US) kept giving them credits to buy our grain.
Alow me to offer my theory on the collapse of the Soviet Union.
The Soviet Union realigned itself to function as a Communist state in the 21st century. No longer can a country by use of the gun force its people to be beholden to the state. In addition, no longer can a country force its ideology on people around the globe by use of expansionism.
The powers that be in Communist Russia came to the realization that it is easier to accomplish their goals peacefully where necessary and through peoples uprisings where necessary. Look at what is going on in the US by the left. Look at Venezuela and other nations in South America.
In addition, Russia needed hard cash. By opening up their country and allowing other countries to be sovereign, money started to flow back into the coffers of the same people that ruled by force. Many of those countries under the Soviet block became Democratic. However, the Communists no longer need to rule by gun. They now use the political and finacial system to achieve the same goals. They are grateful that American money is flowing freely in Eastern Europe. They still have politicians there who are Communist and who are winning elections.
To conclude, at one time Communism had defined borders. There was a fence around it with machine guns to keep people in. In the end the goal was to have a world like this. With technology, money, influence and power, the same can be accomplished just as easily at a rigged ballot box. There are no longer defined borders. There are only very wealthy people who want power and are using an ideology to achieve it.
To a Communist, everyone is equal. To a Communist leader, everyone is equal, but some are more equal than others.
It's good to see one person has bothered to read the article.
I'm amazed how many people will comment on an article without having even read it.
You're right. This article basically says it looks like the Soviet Union collapsed because their planned economic system was incapable of adapting to higher oil prices caused by production declines within the Soviet Union. So, they had to switch to a market system. Hardly a defense of socialism.
Communism certainly is a mindset....could be argued that the mindset is a natural evolution from aristocracy/blood rule, to cash rule...though I suspect in the end the major players are reacting more to transnational corporate intrusion.
If Marxist-Leninist Communism was so inefficient, then why did it last in one form or another for over 70 years in Russia and the Soviet Union before it finally died.
But I read on, and it is quite an interesting article. It is complacent to assume that if a system is not based on free enterprise, it cannot survive. The majority of human history was economic stagnation - regimes throughout human history survived for a long time, not merely despite sluggish economies - but because those economies were sluggish, basically because an impoverished workforce are so preoccupied with making ends meet, they cannot afford the time or effort to challenge the political elites (as Orwell pointed out in 1984).
Eventually though, they fail - external influences and the need for an educated middle class usually means that non-market economies fail - just not as quickly as many think.
This is another interesting piece:
During industrialization, it is a relatively simple feat to borrow the best technology from other industrialized countries and start using it. However, as a greater percent of a work force becomes factory workers rather than farm workers, there is less potential for economic growth based on industrialization alone. Further growth depends on innovation.
Yes, in the early days of a central planned economy/totalitarian regime, there is high economic growth because the state as wide powers to distribute resources around, it then trails off because there are no incentives for individual innovation - why come up with innovative ideas when the state dictates what you do with your life and the money in your pocket.
It overlooks the possibility that oil production declined in tandem with everything else. An ebbing tide lowers all boats.
The above quote is pure ignorance, stupidity or evil. Take your pick.
The quote may not be obviously true, but it is certainly not obviously false. Command economies (or whatever you want to call them) can function for a long time if they have plenty of resources. The Soviet Union lasted for 70 years. The ancient Egyptian empire was basically a command economy and lasted a very long time. Much the same could be said of the Chinese and Incan empires.
No. It specifically addresses that point.
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