Collapse of the USSR

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Template:YouTubeThumb The dissolution of the Union of Soviet Socialist Republics occurred on 26 December 1991. With Russia's president Boris Yeltsin banning the CPSU on December 25 after the successful coup, which ended in USSR's president Mikhail Gorbachev handing the power over to Yeltsin and the independence of 15 former socialist republics. The dissolution marked the end of the Cold War and beginning of the Russian financial crisis.

The collapse

The exact reasons for the collapse are debated to this day, but it's nonetheless possible to get a big picture understanding of why the dissolution happened.

The Crisis of the Absolute Over-Accumulation of Capital

Paresh Chattopadhyay argues that the demise of the Soviet Union can be understood in terms of capital accumulation. There are two forms of capital accumulation, based on the present methods of production and the revolutionising of the methods of production. Under conditions of no revolutionising of the methods of production, the volume of surplus value, for the purpose of accumulation of capital, requires an increase in the rate of exploitation through an extension of the working day or an increase in the volume of available labour-power deployed (e.g., through means of accumulation by dispossession, primitive accumulation, lower unemployment, or, for example in the instance of Saudi Arabia recently, by utilising women). Alternatively, the productivity of labour can be increased through scaling up the disciplining of labour. Absolute over-accumulation of capital occurs when exploitable labour power is insufficient relative to growth of capital. Absolute over-accumulation of capital would, it is hypothesised by Chattopadhyay, be associated with underproduction of commodities (which was endemic in the USSR).

The rapid industrialisation involved drawing a labour-power supply from the peasantry as well as from mobilising natural resources. Surplus value was extracted from the Soviet proletariat. From 1928 onwards, mass unemployment had curtailed and reversed in a labour shortage. To increase the volume of surplus value for the accumulation of capital, the working week was extended as was labour productivity, intensity, and discipline. Likewise, women were increasingly employed in wage-labour (which was in part due to the fact that real wages were low, and thence the requirement for multiple sources of income in households).

"Workers' living standards declined sharply from 1928 to 1933 by at least half, to a bare subsistence level. Part of this was the disastrous outcome of agricultural Collectivization, but part of it was deliberate policy: to finance the forced industrialization of the First Five-Year Plan (1928-1932) by squeezing the workers with simultaneous pay-cuts and production speed-ups. After 1933, living standards began to recover, but only precariously. For example, by 1937, wages had climbed back to 60% of the 1928 level. Nearly all investment was directed to heavy industry and weapons, rather than consumer goods for working families. Despite a shortage of workers for new industrial projects, fierce repression of independent union activity ensured that wages would remain low."[1]

There was a constant downward trend in the growth rates of the USSR from 1937 onwards. Far earlier than the 1960s which Marxist-Leninists identify as the beginning of economic degeneration.Template:Slanted The growth rate and reproduction of the Soviet economy was sustained by the “massive quantitative mobilization of productive resources”[2] as well as the large volume of available labour-power. The rate of growth for constant capital was many fold that of the growth of living labour, “there was no corresponding growth in the productivity of social labour.” [3] There was spurt of growth of the labour productivity through revolutionising the methods of production. The methods of production, fixed capital, in the Soviet Union were notoriously and comparatively outdated and old. Invention, innovation, diffusion, and incremental improvements were falling or consistently low.[4] Gorbachev noted that “the structure of our production remained unchanged and no longer corresponded to the exigencies of scientific and technological progress.”[5]

Innovation was lacking as a result of the central planning system. Soviet enterprise managers had no interest in implementing innovation because this disrupted the production process and they risked failing to reach their production quotas. Yet, they had no real additional financial rewards that they could reap from innovating.

The economic stagnation and eventual economic decline can thus be seen as the crisis of the absolute over-accumulation of capital. In an effort to correct this, the management of capital had to re-invent itself. The various reforms implemented under the rule of subsequent Soviet dictators, particularly the Liberman reforms and the reforms of the Gorbachev era, (market-oriented reforms) were intended to make capital's management more efficient. Gorbachov implemented perestroika (restructuring) to reform the economic system, which was obstructed and sabotaged by Soviet bureaucrats. He then implemented glasnost (openness) to allow for criticism hoping the bureaucrats felt compelled to restructure. The result of political and economic liberalisation in the USSR and its satellite states was that, in the face of relaxed repression of the working class, these workers undertook strike actions and demonstrations to demand civil liberties and democratic elections. Hence, there was not only an economic process of liberalisation, there was likewise a political turnover. The far-reaching liberalisation as spurred by Gorbachev were consolidated and further advanced by electoral democratisation which launched right-wingers to power. This constituted the dissolution of the Soviet Union, in contrast to China where the Communist Party implemented economic liberalisation but managed to hold unto power as the relaxing of repression was less considerable than in the USSR.

Role of Gorbachev's reforms


In 1985, after the death of Chernenko[6], Gorbachev became the general secretary. Gorbachev decided on reforms which would cause major problems, ultimately enabling the dissolution of the Soviet Union. As early as 1984 it was clear that Gorbachev favored reform,[7] an uncontroversial position and something the Soviet system did indeed need. Still, most hadn't expected such drastic reform. In 1985 two economic policies were introduced: a campaign to promote work discipline and a change from extensive to intensive growth by modernizing factories and changing investment policies.[8] The anti-alcoholism was introduced to improve workers' discipline, slashing the alcohol production by half. This policy was unsuccessful and only made the black market much stronger, with sugar disappearing from public stores into black market alcohol production, causing a shortage and a loss of an estimated 20 billion rubles in tax revenues on alcohol sales.[9] The further reforms of that year included the creation of a state quality control body and an attack on wage leveling[10], with the difference between the wages of an industrial specialist and an average worker going from 146% in 1965 to 110% in 1986. It should be noted Gorbachev began showing a change of direction concerning reforms. At the 27th Congress of the CPSU in February 1986, he replaced Yuri Andropov's reform policy “Acceleration of scientific and technological change” with “Acceleration of economic and social development” and referred to the Brezhnev era as one of stagnation which only revolutionary change could solve.[11] Around the same time the term uskoreniye (acceleration) was replaced with perestroika (restructuring) and glasnost (openness). Later reforms that year were political rather than economic in nature. Glasnost i.e. openness led to freedom of expression and loosening of the press. The previously controlled media was now allowed differing points of view which ranged from Stalinism to monarchism. Likewise, the jamming of western radio station 'Radio Liberty' was stopped.[12] This may seem like it was pro-democracy, and while in many ways it was, it was also used to silence Gorbachev's enemies. To give a few examples: The story of the Moscow party head, Viktor Grishin, a man who had been criticized by the newspaper Sovetskaya Rossiya, was replaced by Yeltsin under the orders of Gorbachev.[13] In 1985 Gorbachev named Yakovlev, both a Russian nationalist and anti-communist as the head of agitprop (propaganda).[14] Yakovlev pushed writers and filmmakers for a more liberal culture, turning back of restrictions on literature and harsher criticism of the communist regime. Yakovlev also personally appointed the heads of major newspapers like Novy Mir, Znamya and Ogonyok[15]. Likewise the opposition of withdrawing from Afghanistan was criticized by glasnost.


File:IMF 1992 data.png
[16] The autonomy of enterprises allowed workers to grow their income beyond available goods.

In 1987 the perestroika reforms took place. Reforms which as time went on pushed for not just market reforms, but explicitly capitalist markets reforms. Something Gorbachev just few years ago rejected when at a speech he said “Many of you see the solution to your problems in resorting to market mechanisms in place of direct planning. Some of you look at the market as a lifesaver for your economics. But, comrades, you should not think about life-savers but about the ship, and the ship is socialism."[17] At this time Gorbachev began seeing the CPSU as an obstacle to further reform, with the 1987 plenum marking the beginning of what was in theory democratization, but in practice amounted to liquidation of the party. The proposition of multi-candidate election for party secretary posts and appointing non-party members to senior government posts was one of the first attempts to get rid of the party's powers.[18] [19] On 1 January 1988 the Law on State Enterprise took effect which would provide the election of Labor Councils at enterprises. Councils which were to play a role in decisions about pay, discipline and worker training. The reforms also caused enterprises products being sold to the state based on output the state decided, with the rest being sold though "wholesome trade". Problems with the reforms quickly arose since managers weren't experienced with such autonomy on sales, purchases and financing and the institutions to support this did not exist. Further problems arose since Soviet economy wasn't designed for markets with great deal of it still being planned. Enterprises could raise incomes above the available consumer goods and also put less investments into faster economic growth. This new system also caused problems for the central government in collecting taxes, since earlier they had larger control over their investments.[20] The 1988 Nineteenth party Conference saw the proposition for the most radical political restructuring up to that point; the proposition of the Congress of People‘s Deputies. The people would elect 15.000 deputies to five-year terms, with 750 reserved for party and related organizations. Those deputies would themselves elect a small Supreme soviet in two houses, a permanent body accountable to the Congress. The Congress would elect an executive president. This time saw the worst breadlines appear in USSR history, which anti-communist love to bring up. I should add that wait lines for goods always existed in every country in the Eastern Bloc, yet unlike in perestroika period they were bearable. Since the autonomy of the enterprises allowed workers to grow their income beyond the available goods, shops sold out. What made matters worse was the decline in tax revenues, first caused by the poorly handled alcohol campaign and later by the effects of the Law on State Enterprise.

1989 - 1991

By 1989 being anti-socialist was anything but taboo. Economists who proposed free market ideas, which just few years back would be on the edge of acceptable opinion, were now the more or less the norm. Calls for market socialism changed into regulated market economy, which later changed in just simply market economy. It should be noted that while the system seemed obviously failing, no reform went back, if anything the control of the state was criticized more and more. What isn't surprising in any way. Under capitalist relations the upper parts of the society are better off, which explains why such great deal of wealthiest people in Russia are ex-party members. "director of a large Soviet enterprise was paid about 4 times as much as the average industrial wage. By contrast, the average American corporate chief executive officer’s pay was nearly 150 times that of the average factory worker at that time." [21]

A poll done in june 1991 asking about the ideological position of the Moscow elite showed 76.6% favor for capitalism. This is in stark contrast towards the average workers who polls showed that 46% wanted socialism, with 40% being for capitalism, in which 23% were for capitalism resembling that of the Nordic countries. A referendum while not on economic systems but the preservation of USSR taken in 1991 showed that great majority were for the preservation, excluding few republics like Ukraine, Azerbaijan, Latvia and other.[22] In the meantime Yeltsin has gotten backing of the Soviet people. His attacks on the privileges of the Soviet elite and lack of democracy were popular to the average person. During his political career much if any talk about restoration of capitalism was unheard of. He was popular being for market reforms, which was told would end the waiting lines and make everyone, whenever elite or simple worker shop in the same stores. The miner strike of 1991 was effectively used to gather support for Yeltsin. During Perestroika, miners' living conditions, which were already bad, worsened to the point where basic necessities as soap weren't available. Yeltsin promised to redirect control of the mines from Soviet jurisdiction to Russian republic.[23] [24] All of this together explains how Yeltsin managed to become and stay the chairman of Russian parliament in April 1990. By August 1991, the deterioration of the Soviet Union had become so severe that a group of Soviet leaders formed the State Committee for the State of Emergency (SCSE). The SCSE confronted Gorbachev in his summer home at Foros, Black Sea. They proposed that he turn over power to USSR Vice President Gennadii Yanaev who would proclaim martial law and order. Gorbachev was put under arrest with SCSE declaring him sick the next morning.[25] Stating that the Vice President Yanaev would excerise power untill his return to health. During the 1991 coup attempt Yeltsin called for a strike against the coup with a crowd of 20,000 gathering around the Russian White House, by which the coup attempt failed. Gorbachev was freed from his house arrest in Crimea and returned to Moscow where he was tasked away by Yeltsin with the remains of the Soviet system.

Further reading


  2. p. 68, The Marxian Concept of Capital and the Soviet Experience
  3. p. 77, The Marxian Concept of Capital and the Soviet Experience
  4. p. 73, The Marxian Concept of Capital and the Soviet Experience
  5. p. 74, The Marxian Concept of Capital and the Soviet Experience
  6. Grossman, “Subverted Sovereignty,” quoting Andrei Grachev, 34.
  7. T. H. Rigby, The Changing Soviet System: Mono-organizational Socialism from Its Origins to Gorbachev’s Restructuring (Aldershot, England and Brookfield, Vermont: Canberra University College), 211.
  8. Our Course Remains Unchanged , 14-15.
  9. Noren, James H. (1990) “The Economic Crisis: Another Perspective,” Soviet Economy.
  10. Aslund (1991) "Gorbachev's Struggle for Economic Reform" 81-82.
  11. Mikhail Gorbachev, Political Report of the CPSU Central Committee to the 27th Party Congress (Moscow: Novosti, 1986), 4-5, 26, 29, 40-46, 49, 86.
  12. Keeran. (2010) Socalism betrayed: Behind the collapse of the soviet union 93
  13. Joseph Gibbs, Gorbachev’s Glasnost (College Station: Texas A & M University Press, 1999), 23, 28-29, 33.
  14. Joseph Gibbs, Gorbachev’s Glasnost (1999), 5-6, 8.
  15. John and Carol Garrard, Inside the Soviet Writers’ Union (New York: Free Press, 1990), 201.
  16. Official Soviet data cited in International Monetary Fund 1992a: 49, 56.
  17. Euvgeny Novikov and Patrick Bascio, Gorbachev and the Collapse of the Soviet Communist Party (New York: Peter Lang, 1994), 35.
  18. Pravda, 29 November 1988, p. 1.
  19. Ronald Grigor Suny, The Soviet Experiment (New York, Oxford University Press, 1998)
  20. Noren, (1990), The Economic Crisis: Another Perspective, soviet economy”.
  21. Kotz, David & Weir, Fred. Russia's Path from Gorbachev to Putin: The Demise of the Soviet System and the New Russia(2007)
  23. White et al. (1994, p. 290).
  24. Gwertzman and Kaufman (1992), Collapse of Communism, pp. 360–1).
  25. Hough, 429.