Rise and Fall of the Soviet Union

Dr. Victoria VernonPh.D.(Economics), University of TX, Austin

M.A., Indiana University, BloomingtonB.A., Kharkov State University, Ukraine

RussiaUkraineBelarus Moldova

Kazakhstan ArmeniaGeorgia

Azerbaijan Uzbekistan Kyrgyzstan

TurkmenistanTajikistanEstonia

LithuaniaLatvia

Germany Hungary Poland

Czech RepublicSlovakia SloveniaCroatia

Macedonia Bosnia and HerzegovinaSerbia and Montenegro

Bulgaria RomaniaAlbania

Central and Eastern Europe

GDP 2008 - per capita, GDP 2008 - per capita, purchasing power paritypurchasing power parityhttps://www.cia.gov/library/publications/the-world-factbook/index.htmlhttps://www.cia.gov/library/publications/the-world-factbook/index.html

Rank Country GDP

1 Liechtenstein $ 118,000 10 United States $ 48,000 35 Germany $ 34,800 43 Slovenia $ 30,800 53 Czech Republic $ 26,800 55 Slovakia $22,60057 Estonia $ 21,900 60 Hungary $ 20,500 68 Latvia $ 18,500 69 Lithuania $ 18,400 70 Poland $ 17,800 72 Croatia $ 16,900 75 Russia $ 15,800 84 Mexico $ 14,400 87 Bulgaria $ 13,200 90 Cuba $12,70095 Belarus $12,00096 Kazakhstan $ 12,000

102 Montenegro $10,600

Rank Country GDP103 WORLD $10,500105 Brazil $10,300106 Azerbaijan $ 9,500 108 Macedonia $ 9,200 119 Serbia $8,200122 Ukraine $ 7,800 127 Armenia $6,600128 Bosnia and Herzegovina $ 6,600 131 China $ 6,100 133 Turkmenistan $ 5,800 139 Georgia $ 5,000 155 Iraq $ 4,000 172 Uzbekistan $2,700171 India $ 2,900 175 Moldova $ 2,500 181 Kyrgyzstan $ 2,200 188 Kenya $1,800190 Tajikistan $ 1,800 192 Kosovo $ 1,800

1861 End of Feudalism, end of serfdom1905 Constitutional monarchy, Duma1914-18 World War I1917 February and October Revolutions 1918-21 Civil war, War Communism, famine 1921-28 Lenin’s New Economic Policy (NEP) 1922 Soviet Union formed 1924 Lenin's death 1928 Stalin's First Five Year Plan 1930-33 Collectivization of Agriculture 1930's Purge Trials 1939-45 World War II, beginning of cold war 1953 Stalin's death 1955-64 Khrushchev's regime 1964-82 Brezhnev's regime 1985-91 Gorbachev's regime 1980's Perestroika 1991 Collapse of the Soviet Union

USSR History Timeline

Global expansion of Communist states

1980s: 1/3 of the world's population in 25 nations ruled by Communist governments –US: http://www.cpusa.org/

Dark red: 1920s-1930s Bright red: 1940s-1950s Salmon: 1960s-1980s

Karl Marx (1818-1883)

Vladimir Lenin (1870-1924)

Stalin

Mao

• History represents class-struggles over surplus value• Old inefficient economic order replaced with superior (qualitative leap)

– “Primitive communism" of prehistoric times • no exploitation, equalitarian, free, very poor, no individual could survive

for long without the group– Slavery

• exploitation of defeated group by triumphant group• Classes: slave-owners, slaves

– Feudalism • exploitation based on ownership of land • Classes: land-lords, serfs

– Capitalism• internal contradictions: bourgeoisie (capitalists) proletariat

– Socialism• Transition between capitalism and communism:

–Revolutionary dictatorship of the proletariat– Communism

• Das Kapital: “… the capitalist disappears as superfluous from the production process.”

Marx: History before Capitalism

Communist Manifesto, 1848“The Communists disdain to conceal their

views and aims. They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions.

But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons – the modern working class – the proletarians.

Let the ruling classes tremble at a communist revolution.

The proletarians have nothing to lose but their chains. They have a world to win .”

“A spectre is haunting Europe – the spectre of communism.”

Theory of Dialectical Materialism

Materialism: world is materialDialectics: laws of development of nature,

society1. Universe is an integral whole, all things are

mutually interdependent2. Nature is in a state of constant motion3. Development process: insignificant

quantitative changes lead to fundamental, qualitative leaps from one state to another

4. All things contain within themselves internal contradictions, - primary cause of motion, change, and development

Basis = economic relations in societySuper-structure = institutions: laws,

church, culture, etc

Marx: Labor Theory of Value• Value of any commodity measured in units of labor: V+C+S

– V: Value of labor, subsistence wage to worker– C: Labor embodied in used up machinery – S: Surplus-value, profit of capitalist

• Increase S through exploitation of workers!• Collective rate of profit falls as capital replaces labor

– Capitalist firms in cut-throat competition for business• Introduce technological innovations• Innovator’s quickly lose advantage as innovations diffuses

• Capitalists keep up profit by exploiting labor more – "immiserization" of the working class – More firms fall behind and fail, bankrupt capitalists join proletariat

• Final stages of capitalism: Instability, overproduction, agrarian crises, depressions, political unrest

• Inevitable socialist revolution– proletariat swelling, becoming increasingly exploited– bourgeoisie shrinking, becoming increasingly cut-throat– proletariat rises up in revolt, replacing bourgeoisie as the dominant

class and creating the new socialist order– Revolutions occur where capitalism is the most advanced!

What is Communism?From 1962 CPSU Congress:Communism is a classless social system with one form of public

ownership of the means of production and with full social equality of all members of society.

Under communism, the all-round development of people will be accomplished by the growth of productive forces on the basis of continuous progress in science and technology, all the springs of social wealth will flow abundantly, and the great principle, “from each according to his ability, to each according to his needs”, will be implemented.

Communism is a highly organized society of free, socially conscious working people, a society in which labor for the good of society will become the prime vital requirement of everyone, a clearly recognized necessity, and the ability of each person will be employed to the greatest benefit of the people.

Russia before 1917: Hereditary Monarchy

Peter I (the Great), (1682-1725) Catherine I, (1725-1727)

Peter II, (1727-1730) Anna, (1730-1740)

Ivan VI, (1740-1741) Elizabeth, (1741-1762)

Peter III, (1762) Catherine II (the Great), (1762-1796)

Paul I, (1796-1801) Alexander I, (1801-1825) Nicholas I, (1825-1855)

Alexander II, (1855-1881) Alexander III, (1881-1894)

Nicholas II, (1894-1917, abdicated)

Kievan Rus, Duchy of Moscovy, Mongol invasion (1237-1452)Ivan the Terrible (1547-84), first Tsar of all RussiaThe Romanov dynasty (1613-1917): 19 Tsars

1917 Revolutions• Feb-Oct 1917, Provisional government : a coalition of Social

Democratic parties• Bolshevik party is small, influential only among Petrograd workers• Councils (Soviets) of workers, soldiers, peasants at every factory,

military unit, village• Congress of Workers, Peasant and Soldiers’ Deputies

• Provisional govt unpopular war policies• Fight WWI till victory• Half of working age men drafted, huge human losses• Finland and Ukraine declare independence,

Caucasus and Central Asia on the verge• Peasants desert army

• Summer 1917: Menshevik-headed govt outlaws Bolshevik party for calls to overthrow provisional govt

• Oct 1917: Bolshevik conspire with Petrograd Soviet, central committee votes for armed uprising

• Oct 25: Petrograd workers and soldiers headed by Trotsky took control of Winter Palace

• Second Congress of Soviets presented with Bolshevik majority in Central Committee of Soviets

• Stalin: “Should kulaks be permitted to join collective farms? Of course not, for they are sworn enemies of the collective farm movement”

– 3.5 million peasants arrested as enemies of the state, collected into Gulag camps

– 3.5 million were resettled– 3.5 million died

• Young boy Pavlik Morozov reported his own father

• 1932‑33: Famine in Ukraine – 7 million deaths, 25% of

population, policy-induced – USSR exported agricultural goods,

imported industrial machines, manufactured goods, technology

Phenomenon: Young Communists’

Organizations

Little Octobrists: 7 - 9 year olds

Young Pioneers: 10-14 year olds

Komsomol (Communist Union of Youth) • 14-28 year olds• teaching values of CPSU, political activism

Nazi’s broke Molotov-Ribbontroff Pact and invaded Soviet territory

Britain and United States join forces with Soviet Union

Growth Rates of Output

USSR in 1960-70s:Economy grew more complex – planning complicatedOversized, inefficient bureaucratic apparatus

– USSR GDP 40-70% of US economy– world's largest producer of oil and steel– parity with US on strategic nuclear weapons – 6.4 times ahead of US in manufacture of tractors– 16 times ahead of US in manufacture of grain harvesters– agriculture used 3 times more capital per unit of output, but had 6% of

US labor productivity

Labor Force Participation Rates for

WomenL a bo r F o rc e P a r tic ipa tio n R a te s fo r W o m e n, ag e 40 -4 5 .

1950 1970 1985

Socialist Countries

Bulgaria 78.6 88.5 93.3

Czechoslovakia 52.3 79.9 92.4

East Germany 61.9 79.1 86.1

Hungary 29.0 69.4 84.7

Poland 66.4 79.5 84.7

Romania 75.8 79.5 85.1

Soviet Union 66.8 93.2 96.8

North European Countries 30.9 53.8 71.1

West European Countries 34.5 46.4 55.6

South European Countries 22.4 29.7 37.1

source: Gros and Steinherr, p. 65.

Who gets national income? In the USSR - Workers.

In capitalist countries- Exploitators.National income increased 60% in 1950 compared to 1940

Per Capita GDPCountry 1938 1990

Western Europe Austria 1,800 19,200 Italy 1,300 16,800 Spain 900 4,900Eastern Europe Czech 1,800 3,100 Hungary 1,100 2,800 Poland 1,000 1,700 Romania 700 1,600

Declining Standards of Living

Adult literacy rate, 2005 Rank Country Literacy

1 Czech Republic 99.91 Georgia 99.91 Germany 99.91 United States 99.922 Estonia 99.823 Latvia 99.723 Poland 99.723 Slovenia 99.727 Belarus 99.627 Lithuania 99.627 Slovakia 99.630 Kazakhstan 99.530 Tajikistan 99.532 Armenia 99.432 Russian Federation 99.432 Ukraine 99.435 Hungary 99.335 Uzbekistan 99.338 Azerbaijan 98.838 Turkmenistan 98.8

Rank Country Literacy40 Albania 98.740 Kyrgyzstan 98.745 Bulgaria 98.246 Croatia 98.147 South Korea 97.952 Romania 97.353 Argentina 97.255 Cuba 96.955 Israel 96.959 Moldova 96.260 Republic of Macedonia 96.165 Bosnia and Herzegovina 94.681 China (mainland only) 90.9146 India 61.0

Rank CountryNatural gas - production

(cu m) 1 World 2,640,000,000,000 2 Russia 587,000,000,000 3 United States 548,100,000,000 4 European Union 239,200,000,000 5 Canada 165,800,000,000 6 United Kingdom 105,900,000,000 7 Algeria 80,300,000,000 8 Iran 79,000,000,000 9 Netherlands 77,750,000,000

10 Indonesia 77,600,000,000 11 Saudi Arabia 56,400,000,000 12 Uzbekistan 55,800,000,000 13 Norway 54,600,000,000 14 Turkmenistan 54,600,000,000 15 Malaysia 53,660,000,000 16 Mexico 47,300,000,000 17 United Arab Emirates 44,400,000,000 18 Argentina 37,150,000,000 19 China 35,020,000,000 20 Australia 33,080,000,000

Rank CountryOil - production

(bbl/day), 2005 1 World 79,650,000 2 Saudi Arabia 9,475,000 3 Russia 9,150,000 4 United States 7,610,000 5 Iran 3,979,000 6 China 3,504,000 7 European Union 3,424,000 8 Mexico 3,420,000 9 Norway 3,220,000

10 Venezuela 3,081,000 11 Canada 3,070,000 12 Nigeria 2,451,000 13 Kuwait 2,418,000 14 United Arab Emirates 2,396,000 15 United Kingdom 2,393,000 16 Iraq 2,093,000 17 Brazil 2,010,000 18 Libya 1,643,000 19 Angola 1,600,000 20 Algeria 1,373,000 21 Kazakhstan 1,300,000

http://www.cia.gov/cia/publications/factbook

Global Gas Resource BaseProved Reserves

Current Net Gas ExportersCurrent Net Gas Exporters

Generation by Fuel in Western Europe

avg. GW

• Increasing state interference in the economy –expand state ownership of strategic

sectors (oil, gas) – Gazprom acquired Sibneft

–curb media freedom • 2001 Bargain with oligarchs: President will

overlook the dubious ways business empires were built in murky privatizations of 1990s. In return, stay out of politics, stop bribing officials and pay taxes

• Mikhail Khodorkovsky - Yukos oil company –convicted on tax and fraud charges –Serving 8 years in a Siberian jail–Government renationalized part of Yukos

• Energy used as a foreign policy tool–Gazprom wants control over pipelines in

Ukraine and Belarus–Russia briefly cuts supply of gas for

Ukraine, reduces supply to Europe

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