Changing Economic Priorities, 1953 - 1985

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  • Changing Economic Priorities, 1953 - 1985
    • Investment in Agriculture 1953 - 1964
      • Khrushchev realised in 1953 that agriculture was inefficient and under productive, he argued reforms were needed
        • In order to make incentive Khrushchev offered farmers higher prices and lower quotas, 250% farm incomes 1952 - 1956
          • Khrushchev invested in equipment and farm fertilisers, 30% increase in tractors, 40% fertliser by 1955
            • Virgin lands ambitious, hoped to increase agricultural production by turning unfarmed lands into new farms, this took a lot of funding, grew from 3% to 12% between 1954 - 1959
          • The Corn Campaign was designed to encourage farmers in Ukraine to make Maize to feed animals for meat. This failed, producing 1/2 of US farms, due to wrong climate, lower productivity, bad tractors and fertilisers, also meant less hey so animal feed dropped 30%
        • Virgin lands scheme was successful agriculture produce increased by 35%, more food led t o better standard of living, advertised new reforms
      • Problems occurred with agriculture, inefficient, expensive to fix, took lots of workers (44% compared to US 5%), low output compared to US, didn't reach targets
        • Khrushchev improved soviet agriculture but was hampered by problems of system, didn't address inefficiency and was too ambitious so could never effectively work
      • Problems were; little equipment, ineffective campaigns due to local conditions, bad planning, reform of agricultural sector, inadequate storage facility, inadequate pay, investment cuts, failed to make farms efficient
    • Industrial Modernisation 1953 - 1964
      • Western heavy industry went to light industry that produced high tech goods and consumer goods, new leadership wanted this, but planning methods for heavy industry were less effective for light industry
      • High levels of military spending were needed to keep up with cold war
      • Stalins heirs wanted to increase spending on soviet people, but economy did not have enough funding for both, it fell and grew but ultimately showed military spending led to a reduction in economic growth
      • Seven Year Plan introduced to boost agricultural and consumer good production. Chemical production was key to this, showed how they believed heavy industry was completed
      • Optimism to out compete US was because; early success of virgin lands, high rates of economic growth, technical success in space race
        • There were increases of chemicals and consumer goods but not as significant as hoped, everything was under target (60% increase in consumer goods)
        • Khrushchev decentralised, then centralised, divided the party in two, changed targets to be more ambitious, joke about 'Three Plans a years'
          • Soviet economy was not designed to make consumer goods, inefficient at handling quality goods
          • Consumer targets were set on value, so small amounts of products were made, focused on production rather than consumption, had to guess consumer needs. Goods were often useless, undesirable or unaffordable
    • Economic Reform and Decline after 1964
      • Failure of Khrushchev reforms discredited reforms until end of 1970's, changes in priorities occurred and small economic changes
      • After Khrushchev; party reformed, 5 year plans returned
      • Kosygin reforms implemented giving power to factory managers and judging success on profit levels, but this created rebellions against Soviets so they were scraped
      • Brezhnev increased military investment to reach US levels, and not back down like Khrushchev, nuclear parity was achieved but was a drain on economy
      • Brezhnev dropped the dream of building communism, military spending and slow economic growth showed the dream to fail. Developed socialism was the new dream, this included; job security, low prices (low prices made from imports instead of soviet reform)
      • Second economy or black market allowed to continue as it supplied consumer goods and food
      • Andropov reforms acknowledged things needed to be fixed, for him key issue was labour discipline; anti corruption campaign, anti alcohol campaign, KGB arrested drunks not in work
        • These reforms did not lead to end of Soviet Union or end economic decline
      • Soviet economy declined, and issues were not addressed, Russia was fastest growing economy, good at building new things, but not improving existing things; bad planning meant it never conquered inefficiency
        • Oil price increase meant growth problems could be fixed with selling oil, Union became dependent on this
      • Economics reforms after 1964 were minor, accepted economy, later reforms failed to commit to fix problems in the system of central planning of industry and collectivized agriculture
      • Successive leaders failed to solve economic problems, standard of living was increased, but still worse than the West, golden age of 1950's ended, government forced to import, military spending increased, however oil prices rose, Union remained dysfunctional economic giant, capable of making nukes but not food

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