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The Postindustrial Challenge

Yuri Gagarin. By M. Ananiev

In the postwar period, the leading industrialized countries of the West entered the era of scientific and technical revolution. This set the scene for rapid transition to a new, postindustrial stage of development. As the technological revolution advanced, it was becoming more and more obvious that certain inherent characteristics of the Soviet economic model stood in the way of technological progress. With the exception of the military-industrial complex, the latest scientific and technological achievements were slow to enter into production on a nationwide scale.

Overcentralization, the absence of competition, and a lack of self-interest, motivation, and material incentives at all levels of the economy were the main impediments to technological progress. Moreover, Soviet planners needed to find ways of making the Soviet economic system more attentive to consumers. Endemic shortages of consumer goods, overcrowded housing conditions, primitive consumer services—all cried out for remedy. To continue to ignore consumers’ needs was becoming more and more dangerous politically.

In the new conditions, the political and economic mechanisms created under Stalin began to reveal clearly their serious limitations. The habitual interference of party structures in matters of production became less and less effective; bureaucratic overcentralization could no longer cope with managing efficiently the increasingly sophisticated branch structure of the Soviet economy.

When the Soviet economy showed the first symptoms of a slowdown, the system began to lose the very rationale it was based on. Economic growth, as the necessary condition for the creation of the material base of the future Communist society, was critical for justifying the system. As long as the economy delivered high growth rates, it commanded loyalty. But the declining economic performance began to corrode people’s belief in the ability of the system to create the basis for a society of material plenty and therefore undermined the system’s legitimacy.

All this put pressures on Nikita Khrushchev’s and consecutive Soviet governments to shift away from the Stalinist economic model. After Stalin’s death and until the USSR’s collapse, the Soviet leadership for over thirty years was engaged in an almost continuous process of reforming the Stalinist system of socialist central planning. The objective of the reform programs of all Soviet leaders from Khrushchev (1953–64) to Mikhail Gorbachev (1985–91) was to make the economy more efficient and receptive to technological innovation and more responsive to consumer wants, while retaining its socialist character.

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The Soviet Period


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Understanding the Soviet Period
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