Collapse of socialism in the USSR: Where did Gorbachev go wrong - Essay Example

Collapse of socialism in the USSR: Where did Gorbachev go wrong?Global Financial Crisis By City and State of the institution Date of submission Introduction The notion of a ‘mature socialism’ began in the committees of the Communist Party in 1960s (Furst, 2010). The concept began after the inception of the Leonid’s regime. Specifically, the concept was developed to react to the ideas and beliefs of the Nikita’s regime. Most of the republics in the Soviet Union accepted advanced socialism as the leading principle. However, the death of Leonid almost crippled advanced socialism. Immell (2010) provides that after several years of ‘mature socialism’, the Soviet Union suffered economic and political problems prior to its dissolution in the late 1991. What led to the collapse of the advanced socialism is discussed by political scientists and economical pundits, each group providing a different opinion. Proposers of the socialism structure believe that the doctrines of socialism adopted by Soviet Union were right, but the results were erroneous. However, opponents believe that Soviet Union was attempting to attain a mature socialist structure. A mature socialism was compared to realizing a utopian dream yet utopia is not practical. This paper is focused to explain the reasons why ‘mature socialism’ came to a stall and reforms that were necessary to transform the Soviet Union’s economy. It is also set to shed light on areas that Gorbachev failed prior to the dissolution of Soviet Union amid his attempts to resolve oppression and economic difficulties. 1. How and why did mature socialism come to a stall in the USSR? The Soviet Union’s ‘mature socialism’ was attempting to achieve privileges for those holding political positions In the first place, it can be argued that the ‘mature socialism’ of the Soviet Union was a ‘rent-seeking society’. This is attributed to the fact that a pure socialism, as discussed by scholars, cannot be achieved (Harnecker, 2012). The system was majorly used by individuals in various positions of power to gaining privileges. The socialism system of the Soviet Union was characterized by monopoly of both politics and economy. The monopoly, which seemed interlocked, was used by those holding powerful posts to control access of various positions. The social system was already dominated by bureaucrats who continued benefiting via maintaining the soviet system. As a result, the system was viewed by reformists, such as Gorbachev, as an anti-economic growth system. The bureaucrats were majorly associated with selfish interests; it made it difficult for them to contribute to the general economic and social policies that would improve the welfare of the general public. It can be argued that the general interest of the bureaucrats was to augment the available perquisites and rent. This means that instead of the Soviet Union competing with other countries in terms of economic performance, the country was devoting most of its energy in expanding the levels of bureaucracy (Wallander, 2003, p.153). Consequently, the allocation of the country’s resources was executed in line with political decisions and priorities instead of economic rationales. It was not uncommon for bureaucrats to be deemed successful when they met the set targets and achieved individual benefits. In this regard, the common citizen was not perceived to be important enough to be considered by directors of the state firms while making economical decisions. This partly explains the reason why the perceived ‘mature socialism system’ could not be successful in the long run. Conflict between the Soviet Union’s politics and economic reforms There has been conflict between ideas and interests in the political arena since the ancient times. Peck, Shankar and Bangdiwala (2007, p.143) suppose that although ideas require intensified government involvement, in more often than not circumstances, interest groups are created. The interest groups would always seek to benefit from participation. This means that government is among a majority of institutions that are often used by a number of individuals to exploit the mass. In a number of scenarios, the cost of searching information regarding a certain politician or issue surpasses the value of the information. This was a common phenomenon in the Soviet Union. As a result, a small percentage of the well-informed political groups formed the constituent of the success of a certain politician. In this regard, the politics of the Soviet Union was associated with concentrating benefits to a well-informed group since it represented the votes of a certain political party. At the end, the costs would be dispersed to the large uninformed group of citizens. Consequently, a government would be characterized with efforts of achieving the benefits of the small interest groups on a short term basis as opposed to obtaining the long-term goals. According to Shearer (2009), this contributed significantly to the accumulation of the long-term hidden costs that would be felt in the near future. This also explains why the ‘mature socialism system’ in the Soviet Union was not destined to last. Advanced socialism and economic impracticality A number of scholars, including Lenin and Marx, have perceived that socialism system as a ‘utopian dream’. It is believed that even though politicians and other members of the public may show great devotion to the public service, achieving an economic prosperity by relying on a socialism structure is impossible. It is particularly impossible to achieve gainful performance in a society that is dominated by human persons. Kellstedt and Whitten (2009) state that there have been various attempts to attain a utopian structure, but it has never been achieved by any society in the world. For a utopian structure to be attained theoretically there must be an internal consistency. In the absence of an internal inconsistency, utopian structure is bound to be theoretically impossible. Although utopia can be theoretically possible, it can cease to be practical if it is invaded by opportunism. The Soviet Union’s socialism structure failed to become a theoretically possible utopia. The objectives of socialism, which was obtaining augmented productivity and ethical improvement of human person, was inconsistent with the demands of the various public institutions. It is evident that the attempt of the Soviet Union to achieve a utopian structure was the cause of a continued economic decline and political repression. 2. What kinds of reforms were necessary? a. A radical reform that transform the relationship between the citizen and the government It was not logical for the Soviet Union to replicate the west system given that its economical state was not suitable for the western type of system. There was a need for the Soviet Union to change from the mal type of investment. During the mal investment periods, Soviet Union was characterized by government’s economic management- this should have been changed. The condition was unacceptable given that individuals were working in the wrong employment sector, producing erroneous-goods. Instead of firms experiencing a positive added value, a large number of the Soviet’s state owned enterprises were characterized with negative values. This means that the value of the inputs exceeded that of the outputs. This was due to the Soviet Union’s practice of central planning of the economy. There was a great requirement of a market order to achieve unprecedented success in the long run. In this regard, the Soviet Union should have established a law that upheld market freedom and private ownership. Although private ownership differs strongly with the communist ownership principle, private property has been a leading doctrine in many developed and efficient economies. b. Replacing a communist regime with a liberal one The Soviet Union embraced the socialism structure by allowing collectivisation of farming and establishing large state-enterprises in the hope that scale-of-economies would be attained, which was efficient for the economic growth. It did not linger to the Union Soviet that economies of scale and communism was an illusion of Marxism. According to Grant (2006), the Soviet Union believed that socialism would help to improve the perceived backward parts of the country. This led to more than 80% of the manufacturing sector being dominated by monopolies in the early 1990s (Pomfret, 2007, p.323). Due to monopoly, firms’ value of inputs began exceeding those of outputs. As a result, the government was forced to subsidize various enterprises. This led to the Soviet Union’s government expanding its budget to finance the subsidies resulting in high levels of expenditure. The government opted to printing notes causing an increasing level of inflationary pressures. Coupled with already existing economic difficulties and citizens’ years of frustrations and increased awareness via televisions and other forms of media from neighbouring countries, the socialism structure was doomed to fail. To this end, the Soviet Union would only have survived in the presence of reasonable liberal reforms which include: i. The liberalization of price The liberalization of the price denotes the elimination of government from controlling the prices. Prices should be left to respond to the forces of the market supply and demand. In efficient economies, liberalization has been effective in the sense that there is an effectual coordination among willing sellers and buyers in a market. Prices are responsive to various factors affecting goods and services in an efficient market system. The Soviet Union was traditionally characterized by the government controlling supply and prices. Although citizens are initially scared by price liberalization due to inflation and income disparities, inflationary fear should not be worrisome since individuals were already experiencing ‘oppressed inflation’. Embracing the price liberalization would have ensured that problems of shortages which characterize the socialist structure are eliminated. Tate (1993, pp.71-79) suggests that although prices would rise in the short-term as a result of the ‘oppressed inflation’, competition would ensure that prices would experience decline in the long-run. Perhaps, the high supply of money in the economy (partly explained by rouble held by individuals) is more likely than not to cause inflationary pressures in the event of demand increase. However, on the other hand, prices would not increase by a great margin since a number of individuals would be saving roubles in the hope that prices would decline in the near future. Accordingly, they would be able to acquire goods and services at cheaper prices. Moreover, the blame should also have been shifted to the government for devaluating the Soviet Union’s rouble. This was evident when a considerable number of citizens perceived the rouble being ineffective in the exchange of goods and services. In most circumstances, barter trade was performed by various individuals across the country. In order to eliminate these inefficiencies in the market, price liberalization should have been introduced. However, to achieve tangible success, privatisation of property should be introduced prior to the introduction of price liberalization. This would ensure that monopolistic prices do not dominate the market. Regarding income discrepancies, it is evident that communist regime led to the inconsistency in equality. Therefore, introducing market freedom is likely to correct the mistakes created by the former regime. Rowell (2011, p.179) suggests that such action would ensure the discrepancy between the living standards of an average citizen and state officially is reduced periodically. Even though basic goods are required to be exempted from price liberalization, Soviet Union should have allowed an inclusive policy to correct the shortage of essential goods in the economy (Wegren, 2011, p.148). ii. Privatization There are various forms of establishing private ownership of property. However, Soviet Union should have allowed a process that would avoid creating bureaucracy. In this respect, there was a need of eliminating the subsidies that characterized the state firms, as well as leaving ownership to the present management. In relation to Posner (2010) argument, trade liberalization would have played a key role in adopting the price and order of the world market system. As a result of price liberalization, the enterprises management would have been keen on various market aspects such cost of production. Privatizing an economy would mean that all sectors are privatized irrespective of their sizes. Accordingly, there should be an abolishment of subsidies, as well as price control and state’s instructions regarding the market aspects. Possibilities in the privatized market system should be allowed, such as the liquidation of firms and declaration of insolvency. 3. Where did Gorbachev go wrong? Incorrect process of eliminating the command administration and inheritance of past governments’ forms of corruption Gorbachev adopted a major policy that was different from his predecessors- Perestroika. This policy was concerned with the reform of the economy. Perestroika was bound to transform the Soviet Union’s economy. Gorbachev, however, allowed the continuation of hoarding, mutual favors and apt-to-steal behaviors to characterize the government and party. These features were common in the preceding governments, and in many cases threatened economic development. The past governments were, however, characterized by aspects of command and force. In the face of the post-industrialization period, administration that was based on commands was perceived postdated (Berend, 2004). Although Gorbachev was motivated to alter the command type of administration by allowing enterprise managers to assume control of contracts, the operation of firms did not change. There were tendencies of various ministries perceiving the contracts as assumption of commands. This means that Gorbachev would not have been successful even in the face of introducing features of market in an attempt of correcting the command administration. Contrast between the Gorbachev’s leadership and the regime’s ideology There was also a mistake by Gorbachev attempting to allow privatization. Gorbachev had promised to remain faithful to the thoughts of Marxism and Lenin. Marxist and Leninist was accepted by the Communist Party but was strongly detested by capitalists. Research shows that proposers of Marxism claim that a liberal market exploits proletariat and benefits aristocracy (Lansford 2008). Consequently, Gorbachev was perceived as a leader who wanted to create aristocracy that later would exploit the mass which was supposed to live in a socialist structure. Due to the sharp contrast between the leadership of Gorbachev and the ideology that Communist Party was based on, the Soviet Union leader was bound to fail. Although a small percentage of the economy experienced success due to private enterprise, a large part of the profit made was disliked by citizens. This resentment emerged from the fact that products were being sold more than three times relative to those that are subsidized. These prices had hiked due to shortage that had stricken the market. Another factor that resulted in further collapse of the Soviet Union regarded the Perestroika policy advocating for the entry into the market economy. As a result, most of the firms were not able to provide social services due to high level of operational costs. Consequently, all social services were eliminated which resulted in further decline of the already collapsing economy. Allowing the thought of pluralist Gorbachev leadership caused the Communist Party to wane by allowing the thought of pluralism. The party was forced to transform to be sustainable in the long-run. It was not reasonable for Gorbachev to allow freedom of media and speech since repression that characterized the past and partly the present regime was more likely to be exposed than not. In the event that an oppression system of governance that existed for more than seven decades is revealed at once, there would have been high chances of the mass developing excessive hostility towards those responsible (Blessing, 2011, pp.704-705). It was understandable that Communist Party was the one to be blamed for the repression that lasted for more than seventy years. This explains the reason why nationalities that experienced oppression were frustrated to an extent of starting an autonomist movement. This period was characterized by populace that was discontented with a terrible condition. Due to freedom of speech, they would speak out about their dissatisfaction contributing significantly to the weakening of the Gorbachev’s leadership. Angered by the ineptitude of the present command administration, Gorbachev could not have maintained the popularity experienced in the past. The attempts to remove the mono-ideological way of governance Gorbachev was bound to fail since the Soviet Union was based on a single ideology. The state had remained faithful to the ideology for a long period. In this case, replacing the traditional ideology with other forms of control meant that government was losing its leadership. In such situation, Kipnis (2008, p.279) believes that people would hardly embrace new ideology unless there is willingness. It was very difficult for Communist Party to win the confidence of the populace. The Gorbachev leadership was undermining a number of aspects of the socialist structure. This includes the mono-ideological governance, economic monopoly, a one party state, as well as suspending of various laws. In various attempts made in relation to embracing democracy and allowing pluralist thought, Gorbachev found himself split between the ideologies of the radical reformists and hard-lined members of the Communist Party. Vihalemm and Masso (2007, p.73) confirm that the policies made by Gorbachev became inconsistent as he endeavored to favor both sides. Conclusion It was not possible to embrace the two sides since there was a sharp contrast between them as far as their philosophies and mode of governance were concerned. The right step would have been to support one side and defeat the other as opposed to sitting on the ‘fence’. Foreign minister had earlier reassigned from the ministry following a prediction of dictatorship that was overlooked by Gorbachev. Gorbachev attempts to partner with reformists and conservatives would not have resulted in long-term relationships due to diverse ideologies between the two groups. Primarily, Gorbachev should have embraced the ideologies of conservatism to maintain popularity or devoted whole-heartedly to radical reformation to achieve economical stability. List of references Blessing, B., 2011. From Nazism to Communism: German Schoolteachers under Two Dictatorships. The Journal of Modern History, 83(3), pp.704-706. Furst, J., 2010. Stalins last generation: Soviet post-war youth and the emergence of mature socialism. Oxford: Oxford University Press. Grant, R., 2006. Communism. Milwaukee, WI: World Almanac Library. Harnecker, C., 2012. Cooperatives and Socialism: A View from Cuba. New York: Palgrave Macmillan. Immell, M., 2010. The dissolution of the Soviet Union. Detroit: Greenhaven Press. Kellstedt, P. and Whitten, G., 2009. The fundamentals of political science research. 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