Thank you for your interesting question.
Because the severity of economic, political and social problems became
so intertwined, the collapse of the Soviet Union was inevitable.
The Soviet Union's economy reached a point in the mid 1980's where
something had to be done. Mikhail Gorbachev came to power and he was
aware of the need for change. Gorbachev instituted revolutionary
reforms for the USSR.
Unfortunately, the results of these reforms were a rapid speedup in
the collapse of the economy and society. Eventually, these reforms
led to the disintegration of the empire.
A combination of three levels can explain how the system failed and
what the particular intricacies were:
* Third Level... Cold War competition with the United States and
overextension of the empire through imperialist/colonial land
* Second Level... Economic failures of Socialism and the corruption of
the Communist Party which directed a course to social deprivation.
* First Level... Lenin's implementation of the `vanguard', and terror
tactics, which initiated the problems of the second level. Stalin's
expansion of Lenin's policies and Gorbachev's reforms
When combining the first and second levels they contain psychological
and sociological aspects which explain why people and groups behave in
certain ways. The third level provides the external framework that
influences a country in its foreign (and domestic) policy formulation.
THE COLLAPSE OF THE SOVIET UNION By Luba Komova, Seminar Director
National Security Caucus Foundation
"The collapse of the Soviet Union was the result of the build up of
internal pressure that resulted in an explosion of sufficient force to
destroy the communist ideology that had permeated every aspect of the
country since 1917. These internal pressures were the result of
economic, political and social problems that were allowed to fester
and grow so as each individually affected the other.
These problems were not reactions to external pressures or constraints
placed upon the Soviet Union by another country. They were the result
simply of conceit, lust for power, and an economic system that simply
did not work."
Foundations for Collapse
"The collapse of Communism in the former Soviet Union in 1989 can be
attributed to key failures of the state. First, their economy was a
centralized, stagnant system that was not able to provide for the
people of the country. Secondly, the ruling body of the USSR was
nothing more than a tyrannical, authoritarian class which cared more
for its own security and well-being than of those it was supposed to
serve. These two aspects of the country combined to create a third
issue which helped perpetuate the problems of the system. This
problem was an adverse disruption of each Soviet citizen's individual
psyche, causing irreparable damage to society as a whole. In short
the Soviet system was not able to meet the needs of its people, thus
it could not act as a foundation upon which an industrialized country
could be built.
Economic Imbalances of the Soviet System
One of the most obvious problems of the Soviet economy, and of
Socialist economies in general deals with central planning. What this
means basically is that the determination of what is to be produced,
how much is to be produced, product prices, and worker wages (to name
but a few) all fall under command of the government. This
determination is done through a hierarchical structure of control.
The central planners make aggregate product demand upon the
ministries, who then make individual product demands on the
enterprise, which is where production takes place. The consumer for
whom products are being made has no influence over what is to be
produced. In other words, consumer sovereignty is effectively
The many problems of central planning are obvious. First there is the
fact that it is all but impossible for a small group of people to
establish what should be produced, how many, and the size, shape, and
color of each product for an entire nation. Secondly, making sure
that the inputs needed for production are distributed to the necessary
enterprises, in the right amount and on time is also a problem of
centrally planned economies.
Finally, the way in which plans are determined is an inadequate
representation of actual capacity. An enterprise's total work force,
and total product related machinery is used to determine the
productive capacity necessary to meet the required production quotas.
The share immensity of the Soviet population, and productive capacity
make the idea of centralization an immense undertaking. Furthered by
the fact that the consumer demand is not even taken into account then
efficiency is all but impossible."
"A final point to be made about the inadequacies of central planning
is that it becomes a hindrance to growth. Central planning actually
becomes regressive once the economy reaches a certain level. Once an
economy reaches a point where its size is growing at a constant
"healthy" level, it must give way to more horizontally controlled
market oriented forces. This can be seen to the industrialized
countries of the west during the past fifty years. A time frame in
which the Soviets began their downturn."
"A second problem of the Soviet economic system was the emphasis
placed on producing the means of production. This over-reliance on
one industry leads to decrease in support of and production in other
key areas of the economy that are just as necessary for economic
The two problems that resulted from this mistake were first,
regressive growth occurred in light-industry and in the food industry.
Secondly, their obviously was less available goods on the consumer
market. As was noted in a recent issue of Problems of Economics, the
living standards of society had to be decreased due to the fact that
"four-fifths of industry's production potential serves production
needs and at best only one-fifth is used directly to satisfy the
The inability to supply light-industry with technological improvements
led to a reliance on the importation of foreign technology in the
1970's. This importation led to problems of not only the light sector
but which spilled over to the rest of the economy as well. There was
a rapid technological obsolescence of Soviet machinery. Higher
construction costs also occurred for installing the new equipment.
And finally, there was a further showdown in production plans of
enterprises due to the installation time and training time.
The next area which helped lead to the downfall of the Soviet system
was the lack of specialization in enterprises. This problem resulted
from many things, including the inability of central planning to
forecast the needs for material inputs, and the over-reliance on heavy
industry. The specialization problem occurred when enterprises, in
trying to avert input problems will not only produce their product,
but also attempt to manufacture parts and components for the machinery
used in its facilities. This will result in an unequal scale of
production as compared to the scale of the enterprise.
The specialization problem is directly related to what is known in the
Soviet system as "hoarding of supplies," and "forced substitution."
Due to the likelihood that inputs may arrive late or not at all, an
enterprise will acquire in their ministry level plans, increased
levels of materials than are actually needed. This will result in
materials not being allocated to other industries, hence furthering
the problem, and causing these other industries to partake in forced
substitution. What this means, is that when all the necessary
materials are not available to an enterprise, it will either use a
different material, or the same but of a lesser quality. Obviously,
both these inter- and intra-enterprise tactics will result in fewer
goods of lesser quality for the consumer.
The inefficient means of investment was another problem of the former
Soviet Union. Investment was dealt with like production in that it
was decided upon by the centralized authorities of the government.
How much was to be invested, and where it was to go was decided by a
group of administrators far removed from the production process.
As a result of the planners being out of the production "loop,"
investment packages were made to appear "attractive." The reason for
this was that if a project is seen to have a higher rate of return
than the cost to produce it, it will be more likely to be funded.
This leads directly to a related problem in that once a product is
started, it will be cheaper to finish it than start a new one. In
other words, money for cost over-runs will be given no matter how
badly under-estimated the project was. Finally, while projects are
lining up to be finished, more are being developed so that a
construction and materials backlog will develop.
The next feature problem of the Soviet Union dealt with the generation
and diffusion of technological progress. One of the most obvious
oddities of the centrally planned economy is the separation between
research and development institutions, and the enterprise. The fact
that research and development is controlled from the ministry level,
one step above the enterprise in the hierarchy leaves the possibility
of innovation from actually taking place. The time lag of diffusion
of technical changes that are developed is almost laughable. Firstly,
any proposals must be approved by the appropriate committee in the
ministry. Next, the project goes to an engineering organization to
have plans drawn up. From here it would go to a committee to approve
the design, then on to a construction/ engineer organization for any
new construction processes needed. Finally, an enterprise will be
chosen to build, and test a prototype.
There does take place some innovative suggestions on the enterprise
level but rarely, due to an interesting string of circumstances.
These events are also similar to the investment problem. An
enterprise can contract an R&D firm to test a new idea, but this
seldom happens due to the fact that the enterprise will have to pay
for the research even if it turns out to be inconclusive or wrong.
Secondly (and related to investment) is that implementing the new
technology will require a slow down in production, and not fulfilling
the quota. There is no penalty for not implementing technology as
long as the quota is met, even if it means using more inputs
Thus when enterprises make bids for new investment, they concentrate
on proposals for the extension of capacity which offers ground for
obtaining larger quantities of labor and material inputs as well.
This all leads to a production system that is static in nature, where
no new products are created, resources are wasted and growth as a
whole is slowed. All of this due to the simple fact that product
quality, efficiency of input utilization and incentives to improve are
all made subservient to production goals.
The lack of incentives causes growth to slow by causing a lack of
desire on the part of workers. They have no desire to increase their
work (which can result from investment or technological diffusion)
because the only reward for going over their production quotas is a
higher goal in the next plan. "Soviet managers, workers and farmers
find it to their advantage not to exceed the required minimum."
Transportation problems in the USSR were often overlooked in the
western media for more pressing crises, yet it was at the very root of
many of the other problems. With a country that makes up almost
one-sixth of the total land mass of the planet, obviously
transportation will play a key role in all aspects of economic
development. Ironically, though transportation grew at a slower pace
than did the rest of the economy."
"A final point on transportation shows that the primary transportation
system in the USSR was by rail. The over-reliance on this system led
to a further decline in overall effectiveness and capabilities,
therefore making the problem even worse."
The "soft budget" is another problem of the Soviet economy, that came
to represent the inefficiency and waste of the system. Basically, a
soft budget is a guarantee from the government that, an enterprise is
not held responsible for the financial consequences of its decisions:
its losses will somehow be covered from somewhere. In other words,
enterprises are assured of having subsidies from the government to
cover any losses.
The soft budget symbolizes the basic problems with Socialism. With
the promise of subsidies, managers and workers do not have to face
bankruptcy of the enterprise, and are assured of employment.
Ironically, these assurances lead to tolerance of inefficiency and
waste. The eye towards improvement, and responsiveness to new
developments is also discouraged as a result. For all intents and
purposes, the soft budget requires the Socialist economy to
deteriorate, with less goods available for the consumer.
Until now all the problems mentioned created their own regressive
forces upon the Soviet economy, but combined they form what was the
most serious of problems that the country faced. . . excess demand.
As the name implies, there is more desire for a good or goods than
there are goods available to the consumer.
In general terms, the very point that there was no consumer
sovereignty in this command economy, the consumer was forced to
substitute desired goods for available goods. Unfortunately, for the
Soviet people, similar goods were not always available, or of
sufficient quality for what they desired, so they would be left
empty-handed. This is not the position a government can attempt to
hold for long without having to fear a fissure forming between itself
Socialism for One Class
The second area which the state level of analysis can help determine
actions in the international arena, deals with a country's governing
The Socialist system that was established in 1917 was to be an
intermediate point between two eras of historical development. It was
supposed to represent the middle ground between capitalism and
Communism. This would be the time when the proletariat would rise up
and take control from the bourgeoisie. The state would own and
control the means of production, and would eventually wither away into
the communist utopia.
As history proves, this did not happen. In fact, it could not have
happened in Russia, because what developed right from the onset was
the very antithesis of the egalitarian society which Socialism and
Communism proposed as their main goal.
The seeds of political corruption were sown in the first year of the
revolution. In order to bring about industrialization of the country,
it was decided that a ruling elite, a "vanguard" was necessary because
the people were not ready to assume control. This vanguard became a
concentrated ruling body that controlled all political appointments in
a nepotistic fashion. These "elite" came to be known as the
They continued to solidify their position in the government through
further control of appointments, and of a growing reliance on the use
of terror tactics. These tactics were used to quell opposition and to
promote fear which was hoped would spur acceptance of their rule.
This kind of political system could not coexist indefinitely with a
society operating largely on the basis of spontaneity. Such a
coexistence would have either corrupted the political system or
prompted a collision between them.
What happened to the Soviet leadership was a classic case of the adage
'power corrupts, absolute power corrupts absolutely.' The end result
was not going to be a withering away of the state, rather it would be
a withering away of the society.
The nomenklatura system, and the use of terror came to be accepted by
the ruling body as time went on. The reconstruction of peasant
Russian society came to be implemented from the top down with
increasing violence. The actual physical destruction of the old
society, coupled with the creation of a new society happened by moving
people and industry to where the leadership saw fit. Socialism came
to be represented as subordination through the annihilation/genocide
of unspeakable numbers of people, preventing any form of dissent or
protest, and again, the furthering of the nomenklatura system.
This system was able to persist for many obvious reasons. One reason
was that the nomenklatura benefitted greatly from their position of
authority. Nomenklatura has succeeded in emancipating from
subservience to higher authority. . . it no longer acknowledges any
authority over itself.28
Secondly, as the government became further intertwined with the system
of political appointments, it spread the corruption down to more local
levels in society. This therefore created a bureaucratic giant of
immense proportions linked to the very top of government and
impossible to change without having to wage a 'war' against the entire
Third, the continuation of terror tactics and reliance on the `secret
police' helped to successfully silence (public) opposition to the
party. Fourth, the newly urbanized masses of people had been and were
continuing to be inculcated with vast amounts of propaganda telling
them how much better they were than under the Tsar. Finally, any
economic reforms that would have to take place would out of plain
logic need to have some kind of basis in a free market type system.
This was against the very nature of the revolution, and would have
been admitting failure, therefore reform (of the successful variety)
would not happen.
The combination of economic falsities, and a corrupt, tyrannical
government ruling over a people for over six decades will obviously
have a detrimental effect on society. This problem is thus both
created by the system, and in turn as time moves on, perpetuates the
problem even further. This helps lead the country into a downward
spiral towards oblivion.
In any country, at any time in history, the study of both the economy
and culture must be made together because the two are interdependent
subjects. The external cultural environment influences the economy,
just as much as social values are seen to have their origin within the
Obviously, since society is so tied to the economy, it can be thought
of as a mirror of economic performance. Therefore, the problems of
the Soviet system were cast upon the people."
"The nomenklatura, with all its splendid privileges catered to while
society suffered, spawned resentment among the population. The people
began to see that the revolution was not turning `mother Russia' into
an egalitarian based society. The basic faults of the economy
generated themselves into the very core of the base . . . the people.
The centralization of control brought about lack of incentive in the
workers, why worry about quality when their pay is guaranteed. People
are oriented towards models of behavior that are traditional for the
administrative system: towards formal obedience, towards the
principles "keep a low profile," "don't attract the boss' attention."
Another problem that effected society with the advent of the Soviet
system was due to the destruction of the old social `ways' of life.
At the time, this was of course necessary, the revolution did not want
any reminders of the past to instill doubt in the people. The
traditional Russian culture was lost. The family unit was weakened,
due to the fact of a supposed equality of the sexes.
Also, this was a period of civil war, many families became divided as
a result and the split was intensified by the new system of
rule/reliance on destroying dissenters. The almost entire elimination
of religious tolerance, caused a rapid loss of faith amongst many of
the people. The elimination of the old government also eliminated the
main source of status and roles in society, which of course was
conducive to a growing instability.
The revolution also caused the society to begin its spiral towards
despair by destroying the newly developing economic culture. Prior to
the first World War, some basic free market/capitalistic theories were
coming to a type of genesis.
When these ideas were destroyed by total state control not only had
the changes been negated, but the cultural needs that had started to
grown died as well. This prohibitive nature of the Soviet system
obviously denied society its past, because it diminishes the volume of
social memory, thereby depriving society-drop by drop-of its past,
which is fixed in the memory of the corresponding activities.
Clearly, since the economic culture serves as the social memory of
society, the new system not only destroyed the past, but created new
memories. This happened because new norms and values were created
during the revolution, which were tainted from the beginning with
corruption and falsities. As a result, again, the society came to
represent the system.
As a result the way of judging the value of economic innovations or of
reform was judged under the "old way." If a new program/initiative
did not meet the standards of Socialist ideology it was not adopted.
The political problem is related in some ways to the ideology problem
(since this is an ideologically based government.) The Soviet economy
is based on the concept of central command, the problems of which have
been discussed. This means that any activities supported by the state
(in essence all economic, social activities etc.) will be endowed with
the problems of the state.
In reality the pivot of the Soviet-type system was that it enforced
the construction of a wholly politically determined future, in which
all spheres-economic, social, legal, aesthetic, religious, etc.-were
subordinated to political criteria, regardless of appropriateness, in
the name of an ideologically derived goal.
The faults and weaknesses of the political system were established at
the beginning of the revolution. The policies that were implemented
can perhaps be seen as necessary, but they were taken to extremes.
Perhaps then it is just `bad luck' that the ruling body developed into
an authoritarian structure. The fact is though within the first two
decades of its existence the Soviet Union was far from being a
Socialist state let alone on the path to withering away into a
The economic sphere was laced with all the faults of the political
structure but also contained problems that as a mode of economy
honestly could not work. It could not compete with the vitality of a
market oriented system. This may be a value judgment, of course, but
the facts shows that as the economy grew it reached a point where it
could not support itself in an efficient manner.
The combination of the failing economy and corrupt government led to a
helpless society. Dynamism was not a factor in this country, it was
static and regressive at the same time. As a result the society was a
mirror image of its living conditions. The fall into the abyss
resulted because the interaction of the three as a whole further
stifled the three as independents.
The Soviet economy thus reached a point in the mid 1980's where
something had to be done. When Mikhail Gorbachev came to power he was
seen as a member of a new breed. He was aware of the need for change,
real change not the typically ideologically `correct' change.
Gorbachev instituted what are considered revolutionary reforms for the
USSR. The results however, were a rapid speedup in the collapse of
the economy and of society. Eventually, these reforms led to the
disintegration of the empire."
How did the Cold War come to an end?
"A new generation of leadership came to power in 1985 in the person of
Gorbachev. He was determined to end the Cold War and to bring economic
and political reform to the Soviet Union. He initiated dramatic new
agreements with the United States, involving unilateral concessions in
the armaments race. He also brought an end to Soviet support of client
governments in Eastern Europe and in Cuba. He relaxed the police state
repression in the Soviet empire and took steps to introduce a
democratic political process.
These initiatives rapidly improved relations with the United States
and brought an end to the Cold War. What Gorbachev had not
anticipated, however, was that, without the domination of the police
and a monopoly of power in the hands of the Communist Party, the
Soviet empire would collapse into 16 different national parts.
Nationalism, always a potent force in the modern world, brought about
the collapse of the Soviet Union by 1991.
I recently answered a similar question: The Cold war - How Did the Cold War End?
Soviet Union collapse reasons factors causes