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Soviet Economy Heads Westward
| Article
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18705 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
8 / 1991 |
1,221 Words |
| Author
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Vitali Naishul
Vitali Naishul is with the Soviet Union's Institute of
Economics and Forecasting of Scientific-Technological
Progress. |
This article was written before the recent economic innovations, which patched up considerably the "picture" described here. The evolution of the Soviet economy is, however, irreversible. Seen against this background the economic and political exercises of our almost new leadership seem strikingly absurd.
Panicky reports on empty shelves in Russian stores, curtailed production, and the collapsing economy resound around the world. Both the government and the "democrats" press for urgent measures; the new émigrés from the Soviet Union advise their former compatriots to rally around the Soviet government in the face of the coming crisis. Meanwhile, western countries step up aid programs and interference in Soviet internal affairs. It seems that the country is on the verge of disintegration and anarchy.
A thoughtful analysis shows, however, that the economy is not in too bad shape. The stores are empty, indeed, but not refrigerators at homes. The gross national product is declining, but the vital agricultural production is roughly the same as it used to be. And even the obvious collapse of monetary circulation is no longer frightening when one realizes that it actually never existed during the previous natural economy period. Indeed the fragile balance on the consumer market was maintained through administrative measures.
Strange as it may seem, the country is surviving in the face of the collapse of the old system of management; the main cause underlying this strange stability is that the Brezhnev economy has been replaced not by chaos, but by a quasi-stable organization based on the barter-market economy. The old economic system distributed resources as a result of negotiations between the bosses and their subordinates and through equal barter trades.
It is not easy to get what you want on a barter market. To survive under the present-day conditions, the enterprises not only deal with one another, but also set up regional syndicates of sorts which try to induce other regions to produce a wide assortment of needed products, including "trifles" that could be hard to get through direct exchanges between individual enterprises. Supplies received by a region are distributed between enterprises with the help of foreign-trade methods. Consumer goods, for example, are sold either at factories or on coupons or for exorbitant prices (double or triple the nominal).
Regions producing universal commodities in general demand, such as food, fuel,
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