Readers Write In #120: The Russian Revolution, Chapter 10 – The Smells of Autumn

Posted on December 9, 2019

1


(by G Waugh)

Introduction, Preface, and Chapter 1 are here.

Chapter 2 is here.

Chapter 3 is here.

Chapter 4 is here.

Chapter 5 is here.

Chapter 6 is here.

Chapter 7 is here.

Chapter 8 is here.

Chapter 9 is here.

Alexei Kosygin became the Prime Minister (Chairman of the Council of Ministers) in 1964 immediately following Brezhnev’s accession to the top. Kosygin was a technocrat and the new leadership displayed a strong zeal to reform the national industry through technical innovation and suitable administrative re-organisation. Various branches of the industry were allowed sufficient leeway to interact among themselves which Kosygin thought would infuse some dynamism into the processes of production. This move mandated some amount of decentralisation since the State had to pull out of the business of setting production targets. Price controls were moderately relaxed and demand- oriented targets rather than State-mandated ones were introduced. The concept of performance based incentive was expanded to all types of industries. The reform introduced in 1965, took some five years to get implemented in full and prospects of improved economic output and better standards of living looked bright.

Costs of Being The Saviour:
Inspite of contradicting estimates from various sources, we can safely assume that the USSR was allocating more than 25 percent of its annual budget towards military expenses post the demise of Stalin. In the post WW2 period, especially after Khrushchev took over, the USSR was only happy to be servicing the needs of the Third World, lending financial and military support to various anti colonial movements against the West. But during Brezhnev’s period the conflict between the Western powers and the Vietnamese Communists had intensified and the USSR was obliged to sponsor the latter’s campaign, almost fully. The North Vietnamese militia was led by Ho Chi Minh who banked heavily on the support of the Soviet Union both during the First Indochina war against the imperial France and also during the Second Indochina War, also known as the Vietnam War, against the United States-led forces. The war which lasted for more than a decade was one of the bloodiest in history, with Vietnam being pounded by more than four times the total ammunition employed by all the belligerents in the Second World War. Even though the war drained the American economy considerably, the Soviet Union by mid 1970s is reported to have spent close to 7 billion USD to help Communist Vietnam stand and fight on its own legs. As the war drew to a close in 1975 with the defeat of the American forces, the prestige of the Soviet Union as a genuine military superpower, rose higher among the world nations, even though it was purchased at a terribly unsustainable cost to the internal economy. The Soviets helped in the unification of the whole of Vietnam under Ho Chi Minh, also drawing Cambodia and Laos into the newly formed Southeast Asian Communist bloc.

Brezhnev, even though a Stalinist by principle, was not willing to abandon Khrushchev’s efforts to revive domestic agriculture and industry, as a result of which sincere initiatives such as Kosygin’s reforms were implemented under his regime. The Soviet society which underwent a massive industrialisation drive under Stalin (at the expense of agriculture) remained a booming economy until the late 1960s, the exact point of inflection in its economic trajectory where the costs of the Cold War were beginning to slowly erode the foundations of the young economy. Also Brezhnev drove the Soviet nuclear program to its logical conclusion by enormously investing in the technology and by the early 1970s, even pro-Western observers grudgingly acknowledged that the Soviet Union had achieved its most coveted nuclear parity with the United States.

Yet, the fact that the USSR remained home to thousands of underfed people who had to wait in long queues to obtain their basic necessities for their day-to-day survival was completely undeniable. All of these realities co-existed with the fact that by the early 1970s, the USSR had grown almost 60 percent to the size of the US economy. But from then on, Brezhnev’s rule up to the collapse of the Empire under Gorbachev in 1991, was characterized by economic stagnation and consequent decline.

‘You are not him’
A lot of reasons could be attributed to the stagnation and gradual decline of the Soviet economy, one of which was the nature of the Communist Party leadership that had the last word in all aspects of the country’s administration. As mentioned earlier, the party composition especially at the top of the pyramid were made up of power-mongers, careerists and even black- marketeers during Brezhnev’s time. The great revolutionary vision formed and nurtured during Lenin and Stalin’s time was completely forgotten in the 1970s and all efforts were concentrated on retaining power for as long as possible. As a result, the ambitious reforms of Kosygin were considerably diluted during the execution phase with the Party officials continuing to prevail over industry managers in the decision-making areas related to material flow, supply and demand management. Managers and higher officials manipulated the incentive system so well that they achieved dramatic revisions in their annual pay every year, while the rest of the workers were left to grapple with increasing prices and stagnating wages. Avenues to innovate were also not sufficiently explored since there were strict limits on R&D investments and very minimal rewards and incentives for successful inventions. Even market based demand conditions to the extent it was allowed to exist could not bring about improvements in the quality of consumer products that reached the end user.

Secondly, the Soviet Union witnessed massive migration of citizens from rural to urban areas right from the days of Stalin and by the late 1970s, the urban population almost overtook the total number of rural inhabitants. Most of the urban citizens were industrial workers, clerks, office bearers and teachers whose demand for consumer products was growing rapidly year-on-year. These demands could not be met by the supply chains managed by the State which naturally gave way to a booming black economy. Even though its size remains a mystery to everyone, the impact of the black market on the lives of urban citizens was very huge. The existence of the black market and its unstoppable growth stood testimony to the gaping holes in the rusting Soviet command- driven economic model which was on the other hand being massively drained by the Cold War expenses.

And another most important factor that undermined the Soviet economy was the immense desperation that informed the attitude of its leadership towards economic planning, about the need to compete with the United States and stay relevant all the time in the crucial ideological battle. A predominantly agricultural Russia of the 1920s need not have been, at the first place thrust into an agonising industrialisation drive under Stalin that too at such a humongous human and material cost. And the rankling insecurity of the leadership that pushed them to frequently compare the economic indicators of Russia with that of the United States precluded any useful attempt to sincerely study and address the growing demands of its suffering citizens. From my own point of view, it is not a mistake to assume that the United States was a highly industrialised nation right from the 1920s and economic growth of the superpower post the Second World War was driven to a large extent, by bleeding the hapless Third World economies spread across Latin America, Africa and Asia. On the other hand, from sources deemed reliable, it could confidently be stated that the Soviet Union didn’t colonise or exploit its East European satellites as much as its Western counterpart did in the resource-rich Third World. Soviet Russia, probably owing to its idealistic roots gave more than what it took from the rest of the world and most of its economic achievements were made possible, unlike its competitor, not because of its aggressive expansionism world over, but wholly ‘inspite’ of it. Soviet help to Communist China in its infancy is conservatively estimated to exceed 4 billion USD according to various sources while its economic aid to Cuba and younger communist nations like Vietnam, Cambodia,etc is believed to have approached almost the same sum. Needless to say, these were massive transfers of wealth from the USSR to the Third World that were driven mostly by goodwill and ideological commitment that successfully overrode commercial and geo-political considerations.

It is another simple yet elemental fact that seems to have eluded the policy makers of the Soviet Union that their economy was not modelled to survive on profit motives and thrive on concomitant imperialist designs, unlike that of the United States and hence, comparisons of economic growth rates between the two countries were bound to be futile and often highly misleading.

However, the ‘Destalinised’ Soviet Union having been transformed into a formidable superpower now entrusted with ‘super’ responsibilities that in turn began gnawing at its insides, soldiered on through the 1970s with a weakening economy to boot. In 1979, Leonid Brezhnev, this time received a call for help from neighbouring Afghanistan ruled by a faction ridden Communist Party to set its house in order as quickly as possible. The Soviet Politburo that met on December 24, 1979 at Moscow without its Premier Kosygin, reluctantly ordered the immediate sending of troops to Afghanistan. The thickly eye browed Brezhnev reclined on his chair in one of the musty rooms of the Kremlin must have found it hard to conceal the growing wrinkles of worry that were swiftly spreading all over his forehead, soon after he had signed the order. Had the uncannily resilient Soviet Union managed at last, to find a newer road to its destruction?