How Did Gorbachev Affect The Economy

In 1985, immediately following Konstantin Chernenko’s death, Mikhail Gorbachev was elected as General Secretary of the Soviet Union. Before Gorbachev assumed power, the Soviet Union was Communist in name, however it did not emulate Communist values. Citizens were strictly controlled, as what they read, watched and said was monitored. Citizens were monitored even more about what they can see about their government and country, in order to prevent rebellion or resistance. As Gorbachev began his rule, he recognized that reforms were clearly necessary. Gorbachev introduced many new ideas and guidelines for the Soviet Union, some which hurt the USSR and some that strengthened it. Although Gorbachev’s policies and values weakened the economy it
has positive political impacts.

Gorbachev’s number one priority was to improve and reestablish the Soviet Union economy, however failed.
To be fair, Gorbachev did not come into power with the greatest economic conditions, however his values worsened it. One of Gorbachev’s fundamental values when he came into power was to revitalize the Soviet economy. A main flaw of Gorbachev’s economic reform was his obsession with the machine tool industry. He believed that in order to maintain a strong economy the Soviet Union needed to maintain a heavy emphasis on this industry. While focusing primarily on the machine tool industry, Gorbachev devoted little attention to consumer goods. There were persistent shortages of basic products such as sausages, salt, soap, sugar, notebooks, and most importantly bread. Many people were concerned that Gorbachev and the government were wasting valuable resources in the machine tool industry. Gorbachev understood this flaw and attempted to continue his emphasis in this industry but to utilize raw materials more effectively. He gave factory managers more decision making powers, allowing them fire workers and redistribute wage savings. Additionally, he realigned powers of ministries and committees in order to handle the problem more efficiently. No matter how Gorbachev tried to limit the flaws of his fetish on the machine tool industry, the economy could improve because of his fundamental obsession in the first
place.

With all of the flaws with the machine tool industry, Gorbachev not only continued with his obsession, but increased it. In 1988 the Soviet Union had increased its importation of machinery by 2.5 billion rubles from 1984. The budget for factory and machinery continued to steadily rise. Also in 1988 consumer good imports were about one and half billion rubles less than in 1985.

Another one of Gorbachev’s reforms was to crackdown on the sale of alcohol. By doing so the turnover tax, a tax that taxes intermediate and capital goods, and the sales tax both greatly decreased. This caused the economy to worsen even more as they lost the opportunity to gain more money. In addition, the crackdown on vodka also caused a sugar shortage.

Gorbachev and his economy were deep in debt because of his economic values and goals. In Gorbachev's first year in power, he increased the economy’s debt to a total of 18 million rubles. In his second year, as a result of Gorbachev's policies, the debt increase to a total of 48 million rubles. In 1989, Gorbachev's fourth year in power, the accumulated debt rose to 312 billion rubles. These deficits and debts were an underlying cause of inflation and good shortages.

All of theses consequences of Gorbachev's policies contributed to even more problems. The sugar shortages, reduction of consumer goods, and inflation caused a buyers’ panic. People would buy large quantities of a particular product due to the fear that it would not be available or the price would be too high. This occurred in the Soviet Union, during Gorbachev’s rule. In this environment it is even more challenging to keep food on shelves. Most Soviet stores were empty of basic items such as jewelry, furniture, milk products, sausage, soap, laundry detergent, pasta, tea, matches and even salt.

Shortly following the Russian Revolution in 1917, communism and the Soviet Union began. This government system is a system that primarily promotes the ideas of equality, fairness and openness, however the Soviet communist structure was not this way. The first ruler of the Soviet Union, Vladimir Ilyich Lenin, realized that Soviet citizens needed to be kept on tight reigns. In order to do so he set up a secret police force that executed innocent people without a trial. As the Soviet Union progressed there were many different leaders, however this cruel and harsh rule, that they called communism, maintained the same. If anyone protested they were shot or sent to prison. Moreover, for a long time at least one tenth of Russian population was in a prison camp. Throughout 1917-1984, there was no freedom of speech, no freedom to read or listen, and education was strictly controlled. During this time period basic rights were taken away from the individual. This communist experiment that seemed so great, turned into of the cruelest dictatorships in history.

Although Gorbachev failed to revitalize the economy, his political liberalization was fruitful. Immediately after Gorbachev began ruling the Soviet Union, he removed the old politicians and replaced them with young and more dynamic politicians. Furthermore, Gorbachev intended to consolidate his power. He not only did this to strengthen his political condition, but to maintain his leadership as he attempted to reestablish the Soviet Union. Gorbachev attempted to reform the Soviet system as much as he could, as it was clearly flawed. Gorbachev, unlike any other Soviet leader before him, was open and frank. He made regular visits to towns and factories in order to feel for and blend with the people. Gorbachev often gave public speeches without notes, showing the honesty and openness of this leader. In the Communist party congress in 1987 Gorbachev declared, “The physical system is being a radically transformed. True democracy with free elections, a multiparty system, and human rights are being established and genuine government by the people is being reborn...The U.S.S.R. has become a nation open to the world and cooperation, one that does not even look for you, but rather commands respect and solidarity.” Gorbachev made clear that reform is necessary and will change the face of the Soviet Union. This is the begin to the Soviet Union becoming a more loose and fair government.

Gorbachev made many changes domestically and internationally, however the domestic changes had a bigger effect of the Soviet Union. Gorbachev introduced the policy of glasnost, an idea that maintains transparency. This idea developed into freedom of speech for all citizens. Before Gorbachev assumed power, people would be persecuted or incarcerated for what they said. Additionally, citizens who were wrongfully jailed were released from prison and past distortions of justice were investigated. One of his biggest political reforms came in 1988, when he announced that that the Soviet Union would be ruled by a single president and a Congress of People’s deputies. The Soviet people would elect these deputies in free elections, where there is open competition. Before Gorbachev began assumed power, there had only been one political party in elections. Not only did Gorbachev insure open competition, but he made sure the votes were counted honestly. All of these domestic changes contributed to the fall of communism.

Gorbachev also reformed the international aspects of the Soviet Union. He understood that the Soviet Union could no longer use military force to increase influence in the outside world. Gorbachev explained, “I think it also indicated to us, it should have indicated to us, that military solutions to diplomatic problems don’t always work out the way you want”. Gorbachev further stated that the communist party will become a tolerant party that other republics can think for themselves. A contributing factor to the decline of communism, was Gorbachev’s non-interventionist ideology.