What, do you think, led to the economic stagnation in USSR?

Thank you for your work!

During some of your talks you sometimes mention USSR and that it succeeded in industraliazation of a underdeveloped country, in a short amount of time, despite the horrible humanitarian and economic catastrophes of WWI, civil war, and WWII. You also mention that later, in the 70s, the economy of USSR stagnates, with consequences such as deficit of consumtion goods and growing discontent.

Since USSR was an attempt to create an alternative to the estabilished capitalism system, I beleive we need to learn from it's successes and failures. Therefore I would be very interested in your thoughts on why USSR initially had economic success, and what changed and led to the economic stagnation?

Many thanks in advance!

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  • Denis Camacho
    commented 2017-08-21 16:22:05 -0400
    Thank you once again! I had never heard of Samir Amin and his work before, and the idea of delinking. Very interesting! I will pick up some of his books and read up on this subject.
  • Seyedsepehr Samiei
    commented 2017-08-16 07:44:02 -0400
    That’s a very good question Denis and there is a very interesting answer for it. I am completely convinced by the explanation provided by Samir Amin on this issue. The October revolution in Russia, followed by Western military invasion after WWI and economic boycott after WWII, all resulted in what Samir Amin calls “delinking”. The general tendency of capitalism is to transfer value from under-developed nations to developed ones (i.e. from peripheries to the metropole). This begets a strong force which keeps under-developed nations as economically and politically dependent on metropoles of capitalism (what Samir Amin calls the collective Imperialism of the triad: US, EU and Japan). This is the main reason that, despite all scientific and technological progresses, the so called “third world” countries can never catch up with those advanced nations. Soviet Union, however, “delinked” from this vicious loop and was able to rapidly industrialize itself. The same is true about China, which had a pace of industrialization even faster than the USSR.
    In summary:
    1- Imperialism is a consequence and preserver of asymmetric development of capitalism in global scale
    2- Delinking from global capitalism is thus necessary to “catch up”
    3- Once caught up, the same contradictions plaguing original founders of capitalism, will become highlighted in the new industrialized nations
  • Denis Camacho
    commented 2017-08-09 04:21:41 -0400
    Thank you Seyedsepehr Samiei for your insights! I supose that many of us visitng Prof. Wolffs website are in support of disseminating political and economical power, which in hindsight might have prevented alienation of working class and peasants, deficit of desired consumer goods and corrupt bureaucracy, in the upside-down pyramid of USSR. What do you think then would explain the fast paced industrialization and the economic successes that USSR had up until the stagnation in the 70s?
  • Seyedsepehr Samiei
    commented 2017-08-09 02:08:30 -0400
    Forgive me for my intrusion, but I would like to throw my own 2 cents into this question!
    The stagnation of USSR had several reasons and can only be understood by studying it in all different dimensions it had. Among other things, I think the most salient reasons were the following:
    1- Alienation of working class: As Prof Wolff always mentions, they did not solve the fundamental problem of capitalism, but only replaced private capitalism with state capitalism.
    2- Cold war: The aggregate output of soviet economy was lower than that of the USA, but its standard of living was so low that it had a higher surplus available to be invested in military competition against the United States. This problem again has two dimensions. On the one hand, it is related to the first problem of alienation of working class. The soviet workers had almost no real participation in its planned economy and this allowed the soviet rulers to orient soviet production toward heavy industries and military spending rather than consumer products. On the other hand, the threat of yet another Western invasion and the overhang of nuclear annihilation forced soviet leaders to mobilize the country to deter that threat. Already the Soviet Russia was devastated twice. First right after the revolution when all major powers of the world, including the United States, invaded Russia to remove its soviet state. And second, during WWII when USSR lost 26,000,000 people and most of its infrastructure and industries. The third invasion would totally obliterate them and they thought mobilization to deter that menace was more important than consumer products!
    Nevertheless, when the state of emergency lasts for decades, the ordinary working people lose their faith into the over all system.
    3- Corruption of bureaucracy: Albeit the overall low quality of life, the high ranking party officials enjoyed a somewhat luxury lifestyle. Although it was nothing remotely comparable with the lavish lifestyle of American billionairs, but it was another salt on injury of ordinary people. Indeed, the new post-soviet Russian bourgeois oligarchs emerged out of the same high-ranking party officials.
    4- Bolsheviks lead the revolution in Russia with help of Russian proletariat, which at that time was a tiny fraction of the overall Russian population. The vast majority of Russians were peasants, and Bolsheviks did not have a strong influence over peasant population. Initially Lenin was forced to compromise and granted ownership of small pieces of land to the peasants who worked on those lands. But Russian industries were so immature and right after revolution the factories were abandoned by their previous owners. This lead to a situation where cities were not able to produce anything to compensate for the grain coming from countries and farms. Peasants decided to stop sending their grain to the cities and that begot a great famine within cities. Destitute Bolsheviks then had no choice but to take peasant grain by force, which then provoked civil war and a lasting cleavage between proletariat and peasants. The consequence was the Soviets pirouetting from a democratic state toward an authoritarian form of state, which saw its peek during Stalin.
    This last problem was due to the backwardness of Russia when Bolsheviks came to power. This is a typical problem that underdeveloped countries face when they want to transition from an immature capitalism and mostly pre-capitalistic forms of society into socialism. A hypothetical socialist state in today’s USA or Western European countries would not face this problem. It is also very interesting to observe how Mao Tse Dung of China understood this problem and focused its efforts on the Chinese peasantry. Perhaps that is why the People’s Republic of China did not collapse in the same way that Soviet Union did…
  • Denis Camacho
    published this page in Ask Prof. Wolff 2017-08-08 03:21:11 -0400