RUSSIAN ECONOMY: FROM PLAN TO MARKET NOTES FOR REVISION SEMESTER 1 Introduction (Background info - not in exam) -since 1500s, Russia has prioritised the security of the state over economic and social efficiency >not a homogenous place. Covered lots of diff cultures, religions and languages >low quality of governance over the whole country >Rely heavily on their oil reserves and exports -Marxist theory: movement towards state/public ownership -Leninism: movement of socialising towards communism. Imperialism -Soviet Supreme (SS) was the highest body of state authority and the supreme legislative body in the land. -SS had 3 main responsibilities: (1) law making (2) appointment and monitoring of ministers of government (Council of Ministers) (3) ratifying decisions of republican level SS and below -the Council of Ministers (CofM) were the highest administrative and executive bodies of state authority and execute decisions of the SS -Central planning was introduced by Stalin in 1920s over alternatives as best means to achieving industrialization and economic growth -Gosplan made decisions in Moscow, and these orders passed to all the central ministries -the plan was law and to disobey it was an offence -soviet system distorted how production should work. Was set up by central planning and didn't involve natural production set by supply & demand -there were often over supplied products that wasn't demanded and undersupplied products that were demanded -in 198ft, Gorbachev complained "for Gosplan there exist no authorities, no General Secretaries, no Central Committees'. They do what they want" -Communist Party of the Soviet Union (CPSU) was often criticised for being too involved. It always claimed to know best interests of society -the CPSU controlled the state by ensuring its members dominated all key positions -CPSU undermined the formal democratic nature of the Soviet System in 4 ways: (1) Democratic centralism: above bodies made decisions and passed them down (2) nomenklatura: consisted of "the elite". Appointment rather than election (3) parallelism and podmena: party called all the shots and decisions. These actions then duplicated by everyone else (4) Interlocking membership: party and state were interlocking Economic Planning -when Bolsheviks came intro power, the USSR was in complete disarray. So they implemented enormous amounts of control -a planned economy is one wherein agents are coordinated by specific instructions or derivatives formulated by a superior agency (a planning board) and disseminated through a plan document (directive planning) -agents carry out directives via appropriate incentives or threats -after Stalin died in 1930s, mass terror tactics were never as bad, but still existed -overtime there was a shift from coesion/threats towards incentives -in short, planned economy is based on the bureaucratic allocation of economic resources -plan was set and monitored by Gosplan, and would be passed down towards enterprises to follow out and meet the control figures -state's scope of control/planning increased over time too -a small decision like the quality of clothing was made by bureaucrats, who ultimately had preferences which lay with the military, followed by industry. Consumers were put at the bottom of preferences -they couldn't