By the mid-80s, crisis phenomena were observed in the socio-economic and political spheres of life in the Soviet republics. The hopeless lag of socialist society from the more developed countries of the world became apparent. In order to avoid a final collapse and improve the situation in the country, the Government of the USSR carried out economic reforms in 1985-1991.
Prerequisites for reform
In the 80s, the economy of the Soviet Union was on the verge of collapse. Across the country, there was a slowdown in its development, and in some sectors of the economy there was a strong decline in production. The inefficiency of socialist methods of management was most expressively manifested in mechanical engineering, metallurgy, the metalworking industry, and other branches. Although in 1985 about 150 thousand tons of steel were produced on the territory of the USSR, which was more than in the USA, the country still lacked metal. The reason for this was the imperfect technology of its melting, in which most of the raw materials turned into chips. The situation was aggravated by mismanagement, because of which tons of metal simply rusted in the open.
Economic reforms of the USSR 1985-1991 were necessary not only because of problems in the field of heavy industry. In the early 80s, the Soviet Union evaluated domestic machines and machine tools. Of all the inspected objects, and there were about 20 thousand of them, the third part was found to be technically obsolete and unusable. Low-quality equipment was subject to decommissioning, but it continued to be produced.
Despite the fact that the Soviet Union paid special attention to the development of the defense industry, it also proved to be uncompetitive in the world market. When the microprocessor revolution took place at the junction of the 70-80s throughout the Western world, huge funds were spent in the USSR to support the arms race. Because of this, a sufficient amount of funds was not allocated for the development of science and technology. Soviet society began to lag more and more behind the West in terms of technological and industrial development.
The political and economic reforms of 1985-1991 also matured due to the decline in the real standard of living of the population. Compared to the end of the 60s, by 1980, population incomes decreased almost 3 times. Soviet people increasingly had to hear the word "deficit". All spheres of life were struck by red tape and corruption. There was a decline in the morality of the common man.
The coming to power of Gorbachev
In the spring of 1985, Mikhail Gorbachev became Secretary General of the CPSU Central Committee . Realizing that the country's economy is on the verge of collapse, he proclaimed a course for its reform. The word “perestroika”, new to Soviet people, sounded on television, the meaning of which was to overcome stagnant processes, create an effective and reliable management mechanism aimed at improving and accelerating development in the social and economic spheres of life.
Stages of Economic Reform 1985-1991
Reforming the Soviet economy can be divided into several stages.
- In 1985-1986, the Soviet government, headed by Gorbachev, tried to preserve the socialist system by accelerating the pace of development of the scientific and technological revolution (scientific and technological revolution), re-equipping the engineering industry and activating human resources.
- In 1987, economic reform began. Its meaning was to maintain centralized management in the transition from administrative to economic methods.
- In 1989-1990, they declared a course towards a gradual transition from a socialist model of the economy to a market one. The anti-crisis program “500 days” was developed.
- In 1991, they carried out a monetary reform. Economic recovery has been stymied by inconsistent government action.
Acceleration Policy
The economic reforms of 1985-1991 began with the proclamation of a course to accelerate the country's development. In the fall of 1985, Gorbachev urged enterprise managers to organize a multi-shift regime of work, put into practice socialist competitions and rationalization proposals, monitor compliance with labor discipline in production, and improve product quality. These actions, according to Moscow, should have a positive effect on increasing labor productivity and accelerating the socio-economic sphere of life throughout the USSR. The priority was given to the engineering industry, the products of which were planned to be used for the re-equipment of the national economy.
The acceleration policy announced by M. Gorbachev implied a significant increase in the economic growth rate . Until 2000, the Soviet leadership planned to double the production potential and national income of the state, and increase labor productivity by 2.5 times.
Under Gorbachev, an uncompromising struggle against drunkenness began. According to the politician and his entourage, the anti-alcohol campaign should have a positive effect on strengthening discipline and increasing labor productivity. In many regions, factories for the production of wine and vodka products were closed, and vineyards were ruthlessly cut down. As a result of this policy, the production of alcoholic beverages in the USSR decreased by 2 times. Due to the liquidation of wine and vodka enterprises, the country suffered multi-million losses. Lack of money in the state budget led to a delay in salaries. To make up for the missing funds, the government decided to print new money.
The economic reforms of 1985-1991 in the USSR were manifested in the prohibition of Soviet citizens to profit from unearned income. A person could go to jail for up to 5 years for private employment, unauthorized trade, and other non-state-controlled activities. But it soon became clear that such measures were ineffective, and in November 1986 a law appeared that allowed individual labor activity in the USSR.
The accelerated development of mechanical engineering has led to a reduction in funding for other industries. Because of this, consumer goods began to disappear from free sale. The scientific and technological revolution, which was given a special role in the process of perestroika, did not receive its development. Crisis phenomena further weakened the state. By the end of 1986, it became obvious that a qualitative reform of the economy could not be carried out due to an imperfect state planning system.
Economic Transformation 1987-1989
In 1987, Nikolai Ryzhkov took over as prime minister , promising to stabilize the economy in a year and a half. His government launched a series of reforms aimed at creating a socialist market. From now on, enterprises were transferred to self-financing, they were granted partial self-government, and the scope of their independence expanded. Organizations received the right to cooperate with partners from foreign countries, and their leaders no longer submitted to either the market or officials. The first cooperatives related to shadow structures began to appear. The result of such a policy was unfavorable for the USSR: the government ceased to control the state’s economy. The transition to a socialist market has become impossible. The economic reforms of 1985-1991 did not bring the expected results.
Further attempts to restore the economy
The search for a way out of the crisis continued further. In 1989, Soviet economists G. Yavlinsky and S. Shatalin developed the 500 Days program. Its essence was the transfer of state-owned enterprises to private individuals and the country's transition to market relations. At the same time, the document did not pay attention to such problems as reforming the political system of the state, privatization of real estate, denationalization of land ownership, and monetary reform. Economists have promised that the implementation of their concept in life will not affect the financial situation of the population. The program, approved by the Supreme Soviet of the USSR, was supposed to come into force in October 1990. But it had one significant drawback: it did not reflect the interests of the nomenclature elite. Because of this, Gorbachev at the last moment chose another program that could not ensure the transition to market relations.
Monetary reform and the collapse of the Soviet economy
One of the last attempts to stabilize the economic situation was the implementation of monetary reform in 1991. Gorbachev planned with her help to replenish the treasury and stop the depreciation of the ruble. But the reform led to an uncontrolled rise in prices and a decline in the standard of living of the people. The discontent of the population has reached its limit. Strikes swept through many regions of the state. National separatism began to manifest itself everywhere.
results
The results of the economic reform of 1985-1991 were deplorable. Instead of rebuilding the national economy, government actions exacerbated the situation in the country. None of the planned reforms have been completed. Having destroyed the previous governance structures, the authorities could not create new ones. Under these conditions, the collapse of a huge country became inevitable.