Abstract
On 7 February 1990 the Communist Party of the Soviet Union committed itself to building a democratic market communist economic system based on the ‘organic’ combination of markets and planning (planovo-rynochnaia ekonomika). One week later Leonid Abalkin, Gorbachev’s Deputy Prime Minister for Economic Reform, presented a draft law to Parliament codifying leasing, collective, citizens’ and individual property rights.1 And on 19 March a package of seventeen emergency measures was submitted to the Supreme Soviet, including the introduction of a stock market, aid for consumers who are expected to suffer as the Government retreats from centralised price setting, and a free-floating rouble.2 These actions were followed in rapid succession by a series of progressively more radical initiatives. Food price increases designed to reduce the budgetary deficit were announced on 22 May 1990.3 In September, the Russian republic adopted Boris Yeltsin’s 500 Days program for the transformation of the economy from administrative command planning to market socialism, and in October Gorbachev accepted the goals, but not the time schedule of Stanislav Shatalin’s version of Yeltsin’s plan (perekhod k rynku).4 Clearly Gorbachev is wrestling with the idea of discarding the command system in favour of competitive markets, but none the less is justifiably concerned that his efforts will fail because the shock of the transition will be too great for Soviet society to bear.5
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Notes
Francis X. Clines, ‘Moscow Is Said to Consider Urgent Economic Measures,’ New York Times, 20 March 1990, p. A7. All Union Scientific-Practical Conference on Problems of Radical Economic Reform (Organising Committee), ‘Radical Economic Reform: Top Priority and Long Term Measures’, Ekonomicheshaya gazeta, No. 3 (October 1989) pp. 4-7. Deputy Prime Minister Leonid Abalkin however reversed himself on rouble convertibility on 9 April 1990: ‘The rouble will not be freely convertible to Western currencies for many years.’ See Craig Whitney, ‘Kremlin Hesitates As Deadline Falls For Economic Plan,’ New York Times, 10 April 1990, p. A4. Academician Abalkin is Director of the Institute of Economics. He was appointed Chairman of the Commission on Economic Reform and Deputy Chairman of the USSR Council of Ministers in July 1989. See Boris Rumer, ‘The “Abalkanization” of Soviet Economic Reform’, Problems of Communism, Vol. xxxix, No. 1 (January–February 1990), p. 74.
For a detailed analysis of the current situation see Steven Rosefielde, ‘The Shatalin-Gorbachev Transition Plan’, Global Affairs (forthcoming); Abel Aganbegyan, The Economic Challenge of Perestroika (Bloomington, Indiana: Indiana University Press, 1988)
Anders Aslund, Gorbachev’s Struggle for Economic Reform (New York: Cornell University Press, 1989)
Nikolai Shmelev and Vladimir Popov, The Turning Point: Revitalizing the Soviet Economy (New York: Doubleday, 1989)
Jan Winiecki, The Distorted World of Soviet Type Economies (Pittsburg, Pa.: University of Pittsburg Press, 1988).
‘Mr Abalkin said the decline in industrial production resulted in part from a shift by some military plants to producing consumer goods. This peace dividend, he said, will provide the biggest single source of income for financing the reconstruction of the economy.’ See Whitney, ‘Kremlin Hesitates’, p. A4. Cf. Iu. Iaremenko, ‘Konversiya oboronnoi promysh-lennosti i preobrazovaniye ekonomiki SSSR’, Problemy prognozirovaniya, Vol. 2 (1990) pp. 22–40
Julian Cooper, ‘The Civilian Production of the Soviet Defence Industry’, in Ronald Amann and Julian Cooper, Technical Progress and Soviet Economic Development (Oxford: Basil Blackwell, 1986)
Steven Rosefielde, ‘Assessing Soviet Reforms in the Defense Industry’, Global Affairs, Vol. IV, No. 4 (Autumn, 1989), pp. 57–73
William Kincade and Keith Thomson, ‘Economic Conversion in the USSR: Its Role in Perestroyka’, Problems of Communism, Vol. XXXIX, No. 1 (January–February 1990) pp. 83–92
Steven Rosefielde, ‘Assessing Soviet Reforms in the Defense Industry’, Global Affairs, Vol. IV, No. 4 (Autumn, 1989), pp. 57–73.
Igor Birman, ‘Velichina sovetskikh voennykh raskhodov; metodicheskii aspekt’, paper presented at the AEI Conference on the Comparison of Soviet and American Economies, Airlie House, 21 April 1990. ’A shorter, English version of the paper is also available, The Size of Soviet Military Expenditures: A Methodological Aspect’; Oleg Bogomolov, ‘Kommentarii k dokladu Igora Birmana, “Velichina sovetskikh voennykh raskhodov: metodicheskii tekst”‘, paper presented at the AEI Conference on the Comparison of Soviet and American Economies, Airlie House, 21 April 1990; Committee on the Present Danger, Soviet Defense Expenditures, Washington, DC, 16 May 1989; Mikhail Gorbachev, ‘Ob osnovnykh napravleniyakh vnutrennei i vneshnei politiki SSSR. Doklad predsedatelya verkhovnogo Soveta SSSR, M. S. Gorbacheva’, Krasnaya Zvezda, 31 May 1989, p. 2; A. Izumov, ‘Military Glasnost Lacks Openness’, Moscow News, 17-24 September 1989, and ‘Restructuring the Military Industrial Complex’, New Times, No. 36, 5-11 September 1989; Aleksei Kireyev, ‘What to Spend on Defense’, Ogonek, No. 19 (May 1989); Steven Rosefielde, False Science: Underestimating the Soviet Arms Buildup (New Brunswick, NJ: Transaction, 1987)
Laurie Kurtzweg, ‘Trends in Soviet Gross National Product’, in Gorbachev’s Economic Plans, Vol. 1, Joint Economic Committee of Congress (November 1987) pp. 126–65
Bogomolov, in ‘Kommentarii k dokladu Igora Birmana’, quotes Iu. Ryzhov, Chairman of the Supreme Soviet’s Committee on Science and Education asserting that the Soviets will spend 200 billion roubles on defence in 1990. He cites Novoe vremia, No. 10 (1990) p. 27. The CPD/ official defence outlays ratio in 1989 is 2.83 (218.8/77.3 billion roubles), and the implied consumption dividend using the CIA’s estimate of Soviet consumption is (28.3/412.3 billion roubles), or 6.9 per cent. Igor Birman, Personal Consumption in the USSR and the USA (New York: St Martin’s Press, 1989)
Steven Rosefielde, ‘The Economic Foundations of Soviet National Security Strategy’, Orbis, Vol. 30, No. 2 (Summer 1986) pp. 317–30
Colonel Ivan Yudin, ‘Defense Industry on Khozraschet’, Soviet Military Review, Vol. 10 (1989) p. 24
It should be noted, however, that the benefits of conversion thus far are invisible despite Soviet predictions that GNP would increase 1.4 per cent in 1988 due to the savings generated by conversion. Kireyev, ‘Restructuring the Military-Industrial Complex’; Mikhail Agursky and Hannes Adomeit, The Soviet Military Industrial Complex and Its Internal Mechanism (Center for International Relations, Queens University, Ontario, 1978)
David Holloway, ‘Innovation in the Defense Sector’, in Ronald Amann and Julian Cooper (eds), Industrial Production in the Soviet Union (New Haven: Yale University Press, 1982).
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© 1992 International Council for Soviet and East European Studies and Roy Allison
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Rosefielde, S.S. (1992). The Soviet Peace Dividend: Financing the Transition to Market Socialism. In: Allison, R. (eds) Radical Reform in Soviet Defence Policy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-21722-9_3
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