Did the USSR really fail because Saudi Arabia ramped up oil production in 1985 (supposedly at President Reagan’s behest), thus collapsing oil prices and forcing Moscow into bankruptcy? Color me skeptical:
As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive.
$20 billion sounds like a lot, but for a country the size of the USSR, that really isn’t very much money. While it is undoubtedly true the oil readjustment negated much of the oil revenue the Soviet Union had enjoyed since the OPEC embargo in 1973, I have a hard time believing that oil prices alone—even as something of a tipping point—is what pushed the USSR over the brink.
Furthermore, debt alone couldn’t have collapsed the USSR—even before its collapse in 1991, debt was only about 20% of GDP. In 2004, the U.S.’s debt was 38% of GDP, which was still below the 40% debt incurred after World War II. Many other non-collapsing countries have debt ratios that are far worse—Jamaica, for example, is proud to have reduced its debt to 133% of GDP.
I’m afraid the unfortunately-named Gaidar has fallen for a common fallacy: assigning complex phenomena singular or simplistic causes. In reality, the reason the USSR collapsed (a topic worthy of a far more involved discussion elsewhere) was a combination of factors: debt, overstretch, bad policy & poor planning, corruption, and deep resentment. Since debt was covered above, let’s just briefly look at the rest:
- Overstretch: in the 80′s, the Soviet Union was in the midst of the Afghan War. This was one of many proxy battles it fought with the U.S., and the combined impact likely depleted the government of resources and money that could have been used elsewhere to stimulate growth or encourage flexibility. Additionally, the game of brinksmanship played by President Reagan kept outside pressure on Moscow never to decrease defense spending, which surely had a further drag effect on the budget.
- Bad Policy & Poor Planning: Soviet planners made disastrous policy choices—from the Virgin Lands program, to the futility of supporting an entire society on slave labor in the gulags, to the sloppiness that resulted in the Chernobyl disaster, the USSR was replete with financially ruinous events that could have been prevented. The Communist system was fundamentally unsustainable.
- Corruption: this shouldn’t need much expanding upon, but outside Moscow everyone from police to border guards to troops were reknown for their corruption and susceptibility to bribes. Despite my pseudo-ambivalence from the other day, corruption has a horrendous drag effect on an economy.
- Deep resentment: As all the above factors coalesced in the late 80′s, the Soviets and their puppets in East Europe found it increasingly difficult to maintain the strict control of society needed to maintain the communist system. Widespread resentment in Europe combined with deep dissatisfaction over the negative turn of events resulted in what was essentially a spontaneous mass bloodless revolution (this is a gross simplification, but my meaning is clear). The failure of one regime cascaded across the Eastern Bloc and into the USSR itself, until all the communist governments were evicted.
I know I’m glossing over very interesting details, and I probably left a few factors out of the list. This isn’t meant to be an exhaustive list of factors that caused the USSR’s collapse, but rather it is meant to show that you cannot point the blame to any one factor. The collapse of the Soviet Union was a complicated affair, the result of many otherwise recoverable malaises hitting the country all at once, along with some fundamental societal weaknesses no one on the outside could really see—not some petty squabble over oil prices and a few billion dollars.
This post was written by...
Joshua Foust – author of 1849 posts on Registan.net.
Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from Registan.net. His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua's writing has appeared in the Columbia Journalism Review, Foreign Policy’s AfPak Channel, the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust
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{ 7 comments }
I don’t think we should underestimate the oil factor. In the 70s, hard currency earned through oil sales allowed the Soviet Union to import Western goods on a large scale for the first time. No oil revenue, no hard currency, no Western goods (or grain for that matter – the Soviet Union *never* recovered from collectivisation). But everyone has had a taste of the good life! Add to the mix the humble VCR – a highly under-appreciated factor! Sprinkling of Glasnost. The nomenklatura was corrupted by materialism, but it is obvious that under the current system, a black Volga, first dibs on Western imports, a better apartment and dacha than the people one was meant to serve, were all that one could aspire to. So why not capitulate? Especially attractive to the elites at the republican level, which by then were largely composed of locals. Big fish, small pond > small fish, big pond.
The Soviets had VCRs?
They weren’t a common item, no. They were *very* expensive, and mostly bought on the black market. However around 85-87 Gorbachov allowed small private eneterprise — co-ops basically. So video salons sprang up all over the place. Every dingy apartment building basement, cafe, retired rail carriage became a mini-cinema running badly-dubbed (on purpose, lest the authorities recognize the voices) Merkan cultural output. Aliens, Rambo, Terminator, etc.. I recall seeing Commando for the first time around 1987. I thought it was the best movie eva! (Sometimes it’s best not to revisit things you liked as a child. Ruins the memories. “No retreat, no surrender” did not live up to my initial impressions a mere 5 years later either.) So that’s when I was indocrinated to love America.
There are a lot more reasons for Soviet collapse. One has to say that Soviet economy was merely a “catch-up” economy, all industrial products were a bad copy of that in the west, and which would never get updated.
And yes there were VCRs in the Soviet Union, ironically they came from Afghanistan. Soviet military and medics exchanged their Kalashnikovs (and etc.) for VCRs and color tv sets.
One of the better books on the collapse of the Soviet Union is Mark Beissinger’s Nationalist Mobilization and the Collapse of the Soviet State. I think he makes a pretty good case that it was the spread of nationalist mobilization, which by a certain point could not be contained by the state, that really drove the collapse.
They had BetaMax… that’s why they didn’t make it.
They had BetaMax… that’s why they didn’t make it.