Did the Soviet Economy Work at All?
The purpose of this essay is to examine the Soviet economy. Soviet Union, before its collapse in 1991, was a communist country based on a command economy (Heintz 40W-1). This was an economy in which a centralized government controls the means of production; and the system automatically picks up many drawbacks, other than requiring stability conditions to help function (Harrison 11). One primary disadvantage is the lack of competition and, thus efficiency.
Because the state determines what is produced, how it is produced and distributed, the Soviet dictator and his agents essentially try to determine who works where and for how much pay. This is extremely hostile to the growth of private businesses, which are central to the free market economy. In market economy private companies control the production process and hire workers based on their business needs, and, consequently pay them with wages set by invisible market forces. It is true that in market economy more rich people are present, because the fundamental principle of supply and demand rules that workers with unique skills in high-demand industries receive high salaries for their services. This phenomenon completely satisfies human desires.
In conclusion, Soviet Union enjoyed a relatively stable economy before its collapse that began around 1989; the stability rested on the fact that Soviet, in this period, could employ many technological advances coming from western countries. Innovations and creativity are vital to the sustainability of any society; only market economy can best foster that because it motivates talented workers to achieve their goals with sufficient rewards. Soviet Union collapsed because the Russians did not produce enough technological innovations on their own. Economies, just like machines, need lubricating oil, to run in good standings; when things are overdue, they will break down.
- Harrison, Mark. “Are Command Economies Unstable? Why did the Soviet Economy Collapse?’’ https://www2.warwick.ac.uk/fac/soc/economics/staff/mharrison/inactive/command.pdf. Accessed 20 Oct. 2017.
- Heintz, Jim. “Cops Smash Smirnov’s Doors Down.” Associated Press, 4 Nov. 2000.
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