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Economy of the Soviet Union

Economy of the Soviet Union
The DniproHES hydro-electric power plant, one of the symbols of Soviet economic power, was completed in 1932
CurrencyRouble (SUR)[1]
1 January–31 December (calendar year)[1]
Trade organisations
Comecon, ESCAP and others[1]
Statistics
GDP$820 billion in 1977
(nominal; 2nd)
$1.21 trillion in 1980
(nominal; 2nd)
$1.57 trillion in 1982
(nominal; 2nd)
$2.20 trillion in 1985
(nominal; 2nd)
$2.66 trillion in 1990
(PPP; 2nd)[2]
GDP rank2nd [2][3]
GDP growth
4.7% (in 1977) 4.2% ( in 1980) 3.8% (in 1982) 3.5% (in 1985) 0.9% (in 1990)
GDP per capita
$6,577 in 1977
(nominal)
$7,568 in 1980
(nominal)
$7,943 in 1982
(nominal)
$8,896 in 1985
(nominal)
$9,931 in 1991
(GNP; 28th)[4]
GDP by sector
Agriculture: (20%)
Industry: (80%)
(1988 est.)[1]
14% (43rd) (in 1991) 3.9% (in 1984) [5]
Population below poverty line
1-3% of population (1980 est.)
12% of population (1991 est.)
0.290 (1980 est.)
0.275 (1989 est.)[6]
Labour force
152.3 million (3rd)
(1989 est.)[7]
Labour force by occupation
80% in industry and other non-agricultural sectors; 20% in agriculture (1989 est.)[1]
Unemployment1–2% (1990 est.)[1]
Main industries
Petroleum, steel, motor vehicles, aerospace, machinery, telecommunications, chemicals, heavy industries, electronics, food processing, lumber, mining and defense (1989 est.)[1]
External
Exports$124.7 billion (9th)
(1989 est.)[8]
Export goods
Petroleum and petroleum products, natural gas, metals, wood, machinery, agricultural products and a wide variety of manufactured goods
(1989 est.)[1]
Main export partners
Eastern Bloc 49%, European Community 14%, Cuba 5%, United States, Afghanistan
(1988 est.)[1]
Imports$114.7 billion (10th)
(1989 est.)[9]
Import goods
Grain and other agricultural products, machinery and equipment, steel products (including large-diameter pipe), consumer manufactures[1]
Main import partners
Eastern Bloc 54%, European Community 11%, Cuba, China, United States
(1988 est.)[1]
$55 billion (11th)
(1989 est.)[10]
$27.3 billion
(1988 est.)[11]
Public finances
Revenues$422 billion (5th)
(1990 est.)[12]
Expenses$510 billion (1989 est.)[1]
$53 million (2nd; capital expenditures) (1991 est.)[13]
Economic aid$147.6 billion (1954–1988)[1]

All values, unless otherwise stated, are in US dollars.

The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy was characterized by state control of investment, prices, a dependence on natural resources, lack of consumer goods, little foreign trade, public ownership of industrial assets, macroeconomic stability, low unemployment and high job security.[14]

Beginning in 1930, the course of the economy of the Soviet Union was guided by a series of five-year plans. By the 1950s, the Soviet Union had rapidly evolved from a mainly agrarian society into a major industrial power.[15] Its transformative capacity meant communism consistently appealed to the intellectuals of developing countries in Asia.[16] Impressive growth rates during the first three five-year plans (1928–1940) are particularly notable given that this period is nearly congruent with the Great Depression.[17] During this period, the Soviet Union saw rapid industrial growth while other regions were suffering from crisis.[18] The White House National Security Council of the United States described the continuing growth as a "proven ability to carry backward countries speedily through the crisis of modernization and industrialization", and the impoverished base upon which the five-year plans sought to build meant that at the commencement of Operation Barbarossa in 1941 the country was still poor.[19][20]

Even so, the Soviet Union had the second largest economy in the world from the end of World War II until the mid-1980s. A major strength of the Soviet economy was its enormous supply of oil and gas, which became much more valuable as exports after the world price of oil skyrocketed in the 1970s. As Daniel Yergin notes, the Soviet economy in its final decades was "heavily dependent on vast natural resources–oil and gas in particular". World oil prices collapsed in 1986, putting heavy pressure on the economy.[21] After Mikhail Gorbachev became the General Secretary of the Communist Party of the Soviet Union and came to power in 1985, he began a process of economic liberalization by dismantling the command economy and moving towards a mixed economy modeled after Lenin's New Economic Policy. At its dissolution at the end of 1991, the Soviet Union began a Russian Federation with a growing pile of $66 billion in external debt and with barely a few billion dollars in net gold and foreign exchange reserves.[22]

The complex demands of the modern economy somewhat constrained the central planners. Data fiddling became common practice among the bureaucracy by reporting fulfilled targets and quotas, thus entrenching the crisis. From the Stalin-era to the early Brezhnev-era, the Soviet economy grew slower than Japan and faster than the United States. GDP levels in 1950 (in billion 1990 dollars) were 510 (100%) in the Soviet Union, 161 (100%) in Japan and 1,456 (100%) in the United States. By 1965, the corresponding values were 1,011 (198%), 587 (365%) and 2,607 (179%).[23] The Soviet Union maintained itself as the world's second largest economy in both nominal and purchasing power parity values throughout the Cold War, until 1990 when Japan's economy exceeded $3 trillion in nominal value.[24]

The Soviet Union's relatively medium consumer sector accounted for just almost 60% of the country's GDP in 1990 while the industrial and agricultural sectors contributed 22% and 20% respectively in 1991. Agriculture was the predominant occupation in the Soviet Union before the massive industrialization under Soviet general secretary Joseph Stalin. The service sector was of low importance in the Soviet Union, with the majority of the labor force employed in the industrial sector. The labor force totaled 152.3 million people. Though its GDP crossed $1 trillion in the 1970s and $2 trillion in the 1980s, the effects of central planning were progressively distorted due to the growth of the black market informal second economy in the Soviet Union.[25]

  1. ^ a b c d e f g h i j k l m "Soviet Union Economy 1991". CIA Factbook. 1992. Retrieved 12 June 2010.
  2. ^ a b "GDP – Million 1990". CIA Factbook. 1991. Retrieved 12 June 2010.
  3. ^ "GDP – Million 1991". CIA Factbook. KayLee. 1992. Retrieved 12 June 2010.
  4. ^ "GDP Per Capita 1990". CIA Factbook. 1991. Retrieved 16 January 2017.
  5. ^ "Inflation Rate % 1991". CIA Factbook. 1992. Retrieved 12 June 2010.
  6. ^ Alexeev, Michael V. "Income Distribution in the USSR in the 1980s" (PDF). Review of Income and Wealth (1993). Indiana University. Retrieved 16 April 2017.
  7. ^ "Labor Force 1991". CIA Factbook. 1992. Retrieved 12 June 2010.
  8. ^ "Exports Million 1991". CIA Factbook. 1992. Retrieved 12 June 2010.
  9. ^ "Imports Million 1991". CIA Factbook. 1992. Retrieved 12 June 2010.
  10. ^ "Budget External Debt Million 1991". CIA Factbook. 1992. Archived from the original on 1 November 2012. Retrieved 12 June 2010.
  11. ^ Cite error: The named reference cia1990 was invoked but never defined (see the help page).
  12. ^ "Budget Revenues Million Million 1991". CIA Factbook. 1992. Retrieved 12 June 2010.
  13. ^ "Budget Expenditures Million 1991", CIA Factbook, 1992, archived from the original on 1 November 2012, retrieved 12 June 2010
  14. ^ Hanson, Philip (2003). The Rise and Fall of the Soviet Economy (Routledge). pp. 1–8.
  15. ^ Davies 1998, p. 1, 3.
  16. ^ Peck 2006, p. p. 47.
    One notable person in this regard was Nehru, "who visited the Soviet Union in the late 1920s and was deeply impressed by Soviet industrial progress." See Bradley 2010, pp. 475–476.
  17. ^ Allen 2003, p. 153.
  18. ^ Baten, Jörg (2016). A History of the Global Economy. From 1500 to the Present. Cambridge University Press. pp. 62–63. ISBN 9781107507180.
  19. ^ Harrison 1996, p. 123.
  20. ^ Davies 1998, p. 2.
  21. ^ Daniel Yergin, The Quest: Energy, Security, and the Remaking of the Modern World (2011); quotes on pp 23, 24.
  22. ^ Boughton 2012, p. 288.
  23. ^ Angus Maddison, The World Economy: A Millennial Perspective (2001) pp. 274, 275, 298.
  24. ^ "Japan's IMF nominal GDP Data 1987 to 1989 (October 2014)".
  25. ^ Vladimir G. Treml and Michael V. Alexeev, "THE SECOND ECONOMY AND THE DESTABILIZING EFFECT OF ITS GROWTH ON THE STATE ECONOMY IN THE SOVIET UNION: 1965–1989", BERKELEY-DUKE OCCASIONAL PAPERS ON THE SECOND ECONOMY IN THE USSR, Paper No. 36, December 1993

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