Economic problems in the USSR after the Second World War Essay

â€Å"Neither Stalin, Khrushchev or Brezhnev successfully addressed fundamental economic problems which increasingly dogged the USSR after the Second World War† How far do you agree with this statement? After the war, the USSR was destroyed both physically and economically. The challenge for Stalin therefore was to attempt to rebuild the USSR, particularly focusing on industry and the economy in order to ensure that Russia would remain a world superpower. By the end of Brezhnev’s era however, the situation was very different. The country had undergone a period of stagnation whereby the economy had failed to improve and grow over his period in power. This was due to his lack of willingness to implement new policies in preference of a â€Å"period of stability†. I would suggest that although Brezhnev achieved very little, changes were implemented under both Stalin and Khrushchev. However, these changes were often not always overly successful. Stalin did attempt to address the economic damage that the war had caused and therefore try to rebuild the economy. One way in which he did this was to alter the systems in place already in order to tackle the new problems faced. For example, he addressed the growing complexity of the economy by creating more economic ministries. Further than this at the end of 1947, he adapted Gosplan in order to make it more focused on the economy and therefore limited the State Planning Commission to only planning (therefore transferring its previous responsibilities to arrange the necessary supplies elsewhere). He also adapted where investment was distributed to after the war such as early investment after the war went to regions which had been occupied by the Germans (for example, Donets Region). Stalin also created new policies in order to boost the economy and increase production, in the form of the fourth year plan. This was successful in the way that it effectively produced large amounts of raw materials such as coal (149 million tons in 1945 to 261 million tons in 1950) and oil (19 million tons in 1945 to 40 million tons in 1950). He used shorter term targets for individual enterprises to meet. P Kenez said â€Å"even if we take into consideration the exaggerations built into soviet statistics, it is still indisputable that the Stalinist methods worked, and that the speed of reconstruction was impressive†. Overall the USSR managed to produce a 75% increase on the production of 1940 which shows its extensive success and therefore disagrees with the statement that as a leader he failed to address the economic problems faced. Although it can be suggested that Khrushchev faced less of challenge than Stalin, he still introduced new economic policies which had wide spreading effects. An example of this is introducing the minimum wage in 1956 which guaranteed the workers an increased standard of living and prevented exploitation. Foreign trade hugely increased under Khrushchev due to his extended relationship with the west. Two thirds of the foreign trade was with Comecon countries in Eastern Europe which was also beneficial for communist relationships. Unlike under Stalin, Khrushchev successfully addressed the poor living standards and increased these considerably. Although they were still backwards in comparison to other western countries, for example in 1964, only 5 in 1,000 citizens owned a car; his policies combined with the recovery of the USSR since 1945 did mean improvements were made. Working conditions also improved with shorter working hours, more holidays, better pensions and other social benefits. Khrushchev is often blamed for his failings in agriculture (as addressed below) but John Keep suggests that he at least â€Å"kept peasant affairs at the centre of attention for an entire decade. No other ruler had ever done so, or would do so†. This is evidence that Khrushchev did address some of the problems that the USSR were facing at the time. Filtzer also stated that that these reforms were based on the assumption that agriculture would receive many more resources than he would obtain due to them being diverted to other sectors of the economy. Arguably then Khrushchev did attempt to address these issues. Brezhnev’s time in power is often described as an â€Å"economic stagnation† due to the failure in economic growth at this time. However, he did introduce a limited number of new policies which had equally limited successes. He successfully addressed that Khrushchev’s destructive agricultural policies should be reversed, for example in September 1965 Khrushchev’s sovnarkhoz reforms of 1957 were ended. He did successfully increase foreign trade though, for example exporting oil and gold natural resources from Siberia and the period of dà ¯Ã‚ ¿Ã‚ ½tente led to the high priority of western technologies being imported. Although the Stalinist economic reforms successfully improved output there are also criticisms that can be raised as evidence that Stalin failed to address the economic problems. The fourth year plan is accused to have been inflexible as it focused on heavy industry rather than light consumer goods. These items were what the country really needed after it had been damaged by the war but instead industry was based on government priorities. Further than this, the emphasis was put on quantity rather than quality and therefore many of the goods produced were not of the highest quality. For example, in order for factory workers to reach their targets, they would produce more pairs of shoes of small sizes as this was quicker and had smaller production costs. Stalin also introduced a currency reform which was generally unsuccessful. It made life difficult for the workers as it reduced how much money was in circulation and therefore consumer products such as clothes and shoes were even scarcer than during the war. Due to the reform the black market became more active which increased corruption and crime. It is also suggested that Stalin’s economic policy was less successful towards the end of his time in power. The fifth five year plan should have begun in 1951, yet it was not drafted and approved until October 1952. Perhaps Stalin’s significant failure within economic policy was in agriculture. Despite the huge interruption of the war in production, Stalin did not focus on this policy area. Instead the peasants were treated badly and the amount of state procured grain increased to 60-70% of the harvested grain produced. Investment into agriculture also failed to be addressed. These problems lead to food shortages which further increased the problems of the black markets. Alex Nove suggests that Stalin’s final years were â€Å"ill judged interventions of authority, excessive centralisation of decisions, insufficient investment and lack of adequate incentives†. Khrushchev introduced many new reforms to try to improve industry which were fairly unsuccessful. The Sovnarkhoz reforms ended up causing another layer of bureaucracy and just formed an alternative competition (between regions rather that industry). The black market also grew under Khrushchev as it intervened to satisfy repressed demand. Arguably Khrushchev’s biggest failures were within agriculture however. He insisted upon forming his own policies without any experts advice and then pushed them through bureaucracy rather than trialling them out to see if they would be successful. An obvious example of this is the Virgin Lands Campaign whereby land that was not suitable for crop growth was used for extra agricultural land. Although it did enjoy initial success the weather conditions soon destroyed any crops that had grown and the campaign had to be abandoned. Many of Khrushchev’s failures are attributed to him personally, especially the lack of effective planning of the reforms and the confusion which sometimes arose. Therefore he can be partly personally blamed for the failures to address the economic problems faced by the USSR. The failures seen within Brezhnev’s era are not so much destructive but rather a period of stagnation whereby the economy failed to improve. Evidence of this is found in the NMP (net material product) fell from 10.2% in 1950 to 3.6% in the 1980s. It has been suggested that the leadership didn’t have an accurate view of economic performance as they were not educated well in economics and GOSPLAN was inefficient at reporting findings. An example is one of the â€Å"top† producing factories did not in fact exist when GOSPLAN attempted to give them an award for production. In fact the â€Å"factory† was run on the black market. Brezhnev’s defence costs also affected the economy adversely. By 1980 the USSR was spending more on defence than the USA even though their economy was about one third of the size! Perhaps his largest failure was not to address the problems with the centralised planning system where many of the economic problems initially sprung from. Under Stalin this was successful but by this time the economy had become far too complex to be centralised. Industry also failed to modernise. For example, using the policy of â€Å"storming† was used whereby old equipment was run non-stop until the end of the plan which damaged equipment and wasted resources. Thompson suggests that â€Å"in structural terms, soviet planners by 1980 had arguably created the world’s largest and most advanced nineteenth-century economy†. In conclusion, the extent to the leaders successfully addressed the economic problems in Russia was variable under the different personalities. Stalin arguably faced the biggest challenge and due to the fact he did manage to increase production to such a large extent suggests he was the most successful. Although Khrushchev did not solve all of the problems faced, and his agricultural policies caused more harm than good, he did attempt to address the problems that the USSR were facing. On the other hand, Brezhnev’s rule did not show any improvement, and further than this he did not show any attempts to improve the problems. For this reason Brezhnev can be suggested to be the least successful.