I realise that this is a very open question but I do recall reading that in the economic sense at least the USSR collapsed just before computers and the rise of the internet made their centrally planned economy a viable system.
So I’m just wondering realistically how long could the USSR have held on for. Would a hardliner taking the reigns of power in 1985 have accelerated its demise or prolonged its existence?
Thanks
Only in the dreams of loony lefties. The internet has been one of the great revolutions in communication. It now takes mere seconds for news and thoughts to wing their way around the globe. That means freedom, a complete anathema to central planning.
Actually after I posted that I realised, how could the USSR have controlled the flow of information on the outside world with the existence of the internet? I guess we’re seeing how well that’s working out in China.
Note that China has given up on socialism in anything but name, and is simply trying to hold the line at protecting the old guard’s political power.
Just this morning I heard an interview with a resident of what was then Czechoslovakia on the 40th anniversary of the Soviet invasion, when half a million troops occupied the country. He said that while a military success, it marked the beginning of the end for international communism. Seeing one communist country invade another because the Czechs had decided that mixing democratic government with socialist principles could work made it impossible for all but the most deluded to believe that the Soviets leaders were anything but thugs intent on preserving their own power. I remember seeing the occupying tanks with protesting Czechs hurling Molotov cocktails. Even in black and white it was pretty dramatic.
Computers have been around since the 1950’s.
As for the internet, I don’t think that would make one bit of difference. How do you accurately centrally plan any economy of that size and complexity? How do you motivate people to work hard? How do you determine what research to do for future products (e.g. increasing efficiency etc.)?
The problem with a centrally planned economy is that you are replacing the brains of 100’s of millions of people going to work each day, each trying to optimize within their own sphere of control, with 10’s to 100’s of thousands of brains trying to optimize everything. How could you possibly be better off by reducing by orders of magnitude the amount of brain power being used to solve the various problems?
Why not just control the internet. Isn’t that what China does?
Rapid exchange of information was not the only barrier to makign a centrally planned economy work. There was also the not-insignificant problem of getting people to actually give a damn about their jobs.
This is so true. Self motivation is the key - i think - to communism. When it comes down to it, if the community doesn’t support it self, it doesn’t work.
Hmm. I was too young to remember, but what was going on in Russia at the time? I took a 400 level course on Russian identity during college (history major). Now that I think about it, conditions were ripe to promote the fall. It was rough for the lowest class of people.
There’s an even more fundamental reason why central planning can’t work - central planners simply cannot possess the information required to effectively allocate the nation’s resources. Not only because there’s far too much of it and the economy is far too complex, but because it doesn’t even exist until people are forced to make rational choices that central planning does not force them to make.
Pretend you are a central planner. You’re trying to figure out how many hammers to make this year for the construction industry. How do you do that? Well, you could ask all the people in the country if they need a hammer, and build them. But many people will say they do, and they really don’t. Hey, free hammer. But even if these people are honestly trying to help the state an only request a hammer they really need, they are still going to over-estimate. The information about the real need for hammers doesn’t exist until you weigh the personal value of owning a new hammer against the personal value of owning all the other things you could have instead. So even a person who could really use a hammer might actually rather have a new screwdriver, because he needs that even more - but no one asked him. He may not even realize he needs the screwdriver more, because the relationships between the things you value doesn’t even develop in you mind until you are forced to make trade-offs between them.
This is what prices do. They force you to rationally examine all your needs and decide which are more important. They tell you which jobs make more sense for you to do.
Then there’s the complexity aspect. You order more hammers. But now there’s a shortage of wood for the handles, because you didn’t tell the wood manufacturers to increase the harvest. Or maybe you did, but now there’s a shortage of logging vehicles. Or maybe you’re really smart and thought of that too. But now there’s a shortage of motor oil. Or a shortage of ball-bearings because the hammers you ordered increased demand for steel, which the ball-bearings in the trucks also need. The ramifications of any production decision in a complex economy are astounding. It’s kind of like the six-degrees of separation thing - a big order of hammers can wind up effecting the availability of corn flakes though a complex series of interactions no one person or central planning bureau can possibly understand.
Now think of the billions of decisions like this that are made every day. Imagine a central planner trying to sort out all the conflicting demands on the nation’s resources and allocate everything efficiently. It simply can’t be done. You can have the best, fastest, smartest computers in the world, and they can’t do it either, because the information they need to be efficient is still locked up in the brains of the citizenry.
A capitalist economy is like a massively networked, massively parallel computer system with billions of feedback loops keeping things in balance. Information flows through the price system, carrying the knowledge and desires of everyone exactly where it needs to go. If I decide I need a hammer, not only do I send a signal to the hammer manufacturer that his hammer is useful and in demand, but the fact that I didn’t buy other things sends signals to all the people I might have purchased from instead. Production is increased for hammers, and decreased for the other things. And hammer production raises demand for steel and wood, which raises their prices. This makes hammers slightly more expensive for the next person. But it also makes other things that use steel more expensive. So suddenly all the people who use steel have to decide if it’s still worth it. Some will switch to alternatives. Or their prices will go up and people will buy less, easing the demand on steel. Or maybe the increased price of hammers will decrease their demand, lowering the price of steel for the things we value more.
In the meantime, the new, higher price for steel stimulates production of it, reflecting the new reality of our increased desire for steel.
Everything falls back to an equilibrium, with new prices reflecting the new reality of the relative trade-offs of all these goods.
None of this can effectively happen in a centrally planned economy. That’s one reason why all centrally planned economies fail, and why they all tolerate a large black market - the black market becomes a market-driven safety valve which helps keep the whole rickety affair going for a while.
But the key question you asked is whether or not the Soviet Union could have survived. Sure it could have. Never underestimate the power of fear in keeping a crappy poor country going. North Korea is still around, despite its people being in a constant state of near-starvation. Saddam’s government was remarkably stable despite the horrible suffering of the people. Compared to those countries, life in the Soviet Union wasn’t that bad. North Korea has a per-capita income of a few hundred dollars a year. The Soviet Union had a per-capita income more than ten times higher. The people generally weren’t starving - they were just severely under-performing their potential.
It would have eventually collapsed, no doubt. But that collapse could have come in ten years, or in fifty.
Self-motivation might be a key on a Kibbutz, where the choices are simple. But it has nothing to do with the success or failure of a large centrally planned economy. The Soviets could be pretty good at motivating people - there was an extensive system of punishments and rewards to drive ‘good’ behavior. The problem was that the people couldn’t act rationally because they weren’t free to make choices about the things they needed. They could all be perfectly dedicated to working their asses off for the glory of the state, and it still wouldn’t work.
I’m going to bet that you spent some time in a communist country. This post by Yoanis Sanchez, who blogs from Cuba captures the essence of why communism has failed in Cuba:
“At his young age, he already understands that it doesn’t matter how many times you cross the line of illegality as long as you keep applauding. Some slogans shouted at a political event, or that time he spoke out against a counterrevolutionary group, have helped him keep his lucrative employment. His hands, that today steal, cheat customers, and divert goods from the state, six years ago these same hands signed a constitutional amendment to make the system “irreversible.” For him, if they let him continue to line his pockets, socialism could well be eternal.”
The soviet system motivated people but in the wrong direction (we clearly agree, just expanding on your point). Factories would overbuild when the opportunity arose and stockpile goods for future situations when they weren’t able to meet quota. Lots of resources (labor, money, etc.) tied up in solving the wrong problem.
A “centrally planned” economy is going to be inefficient-just look at public education, for example. The reason: supression of markets means that the information given by markets isn’t there, in a word, buyers don’t know what is available, sellers don’t know what to sell, and producers don’t know what to make. It is like the joke from Krushchev’s time: “in the future, every Soviet family will have a jet plane”! (rejoinder :'Great! then we can hop into our planes and buy tomatoes in Armenia!"
The real fact is: Soviet Russia almost collapsed twice-each time, it was rescued by the West:
-in the 1930’s, famine in the Ukraine killed 3.5 million people-country-wide starvation was prevented by US food aid (Herbert Hoover).led to a collapse in Soviet food production: only US and European grain shipments kept the regime in power.
In the early 1960’s Krushchev’s failed agriculture ("let’s plant corn in Siberia!)
In the early 1970’s, Russia faced collapse-but the big run-up in oil prices rescued the regime again!
This same principle applies even within a company or a department within a company. I design and build business computer systems which involves quite a bit of working with groups of people and their decision making processes. One thing I’ve noticed is that trying to centrally optimize, even at the departmental level, is very very tough, there are just too many details to consider simultaneously. Even at this much smaller level than an entire economy requires brains/decision making at the lowest level and properly aligned motivation.
However, while the economy would crash and devastate the country over and over, and the nation would likey see a long-term decline in population, the state as an organized power group can survive virtually anything. It must keep control of the military and state security, but this is feasible. They may return a wealthy country to abject poverty, but as long as they retain the instruments of raw force, they can continue to hold power indefinitely.
And of course the hoarding continued on a personal level. I have spoken to someone who lived through the Soviet times. I was told that you would go to the store and there would be no coffee, tea, sugar, flour, or vodka, or many other staples, but if you went to people’s homes they would have shelves full of the stuff. He laughingly called it a “Soviet Miracle.”
If something was available people would purchase it whether they needed it or not, because it might not be available when they did need it. This made it more difficult for the people who actually needed it to obtain, and made them all the more likely to purchase and hoard it when it did become available.
Yes, I believe this is called Cuba.
This also made it impossible for the central planners to even remotely figure out what people needed. People would join queues for goods as they formed - without even knowing what people were lining up for. Hey, if there’s a line, there must be something good at the end.
The result was that you couldn’t even use demand information to figure out what people needed, because when there are chronic shortages, people will grab everything you offer, whether they need it or not. I’ll bet a lot of planners surreptitiously monitored prices on the black market to help figure out what to make, but even that is a poor substitute for just letting markets work.
Agreed.
Yeah.
So, correct me if I’m wrong in this: you have a downward spiral-type effect where in essence, the fire is fueling itself. In regards to the OP, do you think Russia was doomed from the start, or could they have recovered while maintaining the communist way. I.e., what do you think could have brought about change?