WI: The 'Soviet Russia's economic miracle'

What if the Soviet Union followed China's reform policies of economic liberalisation, while maintaining the Soviet Political structure, in an analogous way to how China has adopted 'State Capitalism' while maintaining the Chinese Communist party system.

The collapse of the Soviet Union can be attributed to several factors, one of the major contributing factors being the adoption of liberalising soviet politics under Gorbechev, but not liberalising economic practices.

The discussion is, that during the 1980s, what if the Soviet Union begins implementing widespread economic reforms, under the form of 'State Capitalism', and maintains communist party rule in Russia and Eastern Europe.


How does the geopolitics look today? Does the Soviet Union survive? Is the Cold War still threatened by a climate change like warming ¬.¬, or is their a substantial detente between the world power blocks?
 

ccdsah

Donor
What if the Soviet Union followed China's reform policies of economic liberalisation, while maintaining the Soviet Political structure, in an analogous way to how China has adopted 'State Capitalism' while maintaining the Chinese Communist party system.

The collapse of the Soviet Union can be attributed to several factors, one of the major contributing factors being the adoption of liberalising soviet politics under Gorbechev, but not liberalising economic practices.

The discussion is, that during the 1980s, what if the Soviet Union begins implementing widespread economic reforms, under the form of 'State Capitalism', and maintains communist party rule in Russia and Eastern Europe.


How does the geopolitics look today? Does the Soviet Union survive? Is the Cold War still threatened by a climate change like warming ¬.¬, or is their a substantial detente between the world power blocks?

The main problem is that SU was the enemy in the Cold Waw; so I don't see US and the rest of the West investing as much in soviet union as they did in China...
 
anything is good for the union that helps the soviets get their heads out of the noose which was oil trade with the west. when saudi arabia expanded production they were done for.

doing the same same thing eastern germany did in the 60s, basically state capitalism lite, would be a good start.

but giving the soviets a sound economy will probably make the cold war going on well into the 21st century.
 
Plus China had a large untapped reservoir of work force willing to work for a low wages, unlike USSR that had almost 100% employment with workers expecting comparatively large wages.
 
Plus China had a large untapped reservoir of work force willing to work for a low wages, unlike USSR that had almost 100% employment with workers expecting comparatively large wages.

True, they seem NOT to be set up for this as well as China.

But could they still get some improvement?

They do have a much more educated workforce and industrial infrastructure. Hell, some of their military and space capabilities were quite competitive.

IMO, this would have been a better strategy for them.
 

amphibulous

Banned
Plus China had a large untapped reservoir of work force willing to work for a low wages, unlike USSR that had almost 100% employment with workers expecting comparatively large wages.

However, Russia has ***oil.*** And its engineering industry is pretty advanced its agriculture could easily be a world class force with reform, and it is awash with minerals. Dismissing its economic potential because it doesn't match China's is not sensible - it is the R in BRIC afterall!

Hell, some of their military and space capabilities were quite competitive.

If anything that's an underestimate - the US's best space launcher today is a fuel tank on top of a late 60's Russian rocket design manufactured under license in the USA.

If the Party keeps a firm grasp on power but they allow a limited internal market for resource allocation and to boost efficiency and reduce defense spending, then what you get is pretty formidable.
 
What we have to remember as well is that by changing Soviet economic history you will also change Chinese economic history and have created several butterflies that weren't in our own time.


Critically, let us explore what would have happened if the collectivisation process had been reversed. We take the agricultural sector and split up the mass state farms into a large number of privately owned 'farm collectives' rather than produce what the state tells them to produce, they are instead allowed to produce what they deem the soviet bloc needs, these foodstuffs then being allowed to be 'traded' as supply and demand dictates. These farms operate essentially as 'cooperatives' whereby they are owned by the workers that own them.

This process is followed by the manufacturing industries quickly thereafter.

In doing so the 'centrally planned economy' gets turned into 'the peoples planned economy' whereby the workers and not the politicians are allowed to dictate the targets and choices for production.
 
I think someone put it this way once to best describe why the Russian economy felled.

The Soviet economy was based off Lenin's ideology and no one in the Soviet hierarchy could say Lenin was wrong.

In the PRC economy at first was based off of Stalinism and then Mao's ideology the great leaps forward were failures of epic proportions. So China's government was easily able to say this is the wrong way to lead a country and reformed its economy.
 
I think someone put it this way once to best describe why the Russian economy felled.

The Soviet economy was based off Lenin's ideology and no one in the Soviet hierarchy could say Lenin was wrong.

In the PRC economy at first was based off of Stalinism and then Mao's ideology the great leaps forward were failures of epic proportions. So China's government was easily able to say this is the wrong way to lead a country and reformed its economy.

Lenin also introduced the New Economic Policy, which was rather capitalist. I imagine that if economic reforms were presented as the NEP 2.0 they could be implemented. Especially if they involve the kind of reforms the Genmotty was talking about. The problem is the entrenched bureaucracy, a lot of their power came from their control over the economy and they will fight to keep it. However if the with the state the Soviet economy was in in the late eighties I think that Gorbachev could get the reforms implemented by telling the party that if they don't reform the economy the country will collapse, which is true.
 
Lenin also introduced the New Economic Policy, which was rather capitalist. I imagine that if economic reforms were presented as the NEP 2.0 they could be implemented. Especially if they involve the kind of reforms the Genmotty was talking about. The problem is the entrenched bureaucracy, a lot of their power came from their control over the economy and they will fight to keep it. However if the with the state the Soviet economy was in in the late eighties I think that Gorbachev could get the reforms implemented by telling the party that if they don't reform the economy the country will collapse, which is true.


They don't have to do everything at once. Start in a few sections. Let some success build demand for more reform.
 
The main problem is that SU was the enemy in the Cold War; so I don't see US and the rest of the West investing as much in soviet union as they did in China...

I realize college can get leftist, but I don't really think Seattle University was much of an enemy. SU might be a phone code or something for the Soviets, but the real short hand is USSR. I ain't picking on you or nothing, SU for USSR just bugs me.
 
What if there was a Soviet Civil War where the "West and the Rest" support the rebels discreetly, but the rebels are still hesitant to go full-capitalist and so the Union remains, albeit in a different state?
 

RousseauX

Donor
The discussion is, that during the 1980s, what if the Soviet Union begins implementing widespread economic reforms, under the form of 'State Capitalism', and maintains communist party rule in Russia and Eastern Europe.
They -did- do this and failed for two reasons, one is that they concentrated on reforming the State owned enterprises instead of going for a more decentralized model like China did. The problem with this approach is that SOEs are the most privileged class in the Soviet Union and therefore ended up retaining a lot of the inefficiencies inherit in the system (i.e soft-budget constraint: State owned banks would just keep giving failed enterprises money). The other is that the USSR was already a middle-income country and therefore will not experience growth like China's pretty much no matter what.
 

RousseauX

Donor
I think someone put it this way once to best describe why the Russian economy felled.

The Soviet economy was based off Lenin's ideology and no one in the Soviet hierarchy could say Lenin was wrong.

In the PRC economy at first was based off of Stalinism and then Mao's ideology the great leaps forward were failures of epic proportions. So China's government was easily able to say this is the wrong way to lead a country and reformed its economy.
This isn't really true for the industrial sector (it was true for agriculture and rural industry), China's leadership was able to reframe the debate of Capitalism vs Socialism by using Foreign direct investments. Allowing FDIs into the Special Economic Zones created serious competition for the state sector up to the point when they themselves were asking for more liberal economic laws when in the USSR it was the state sector which fought back against many of the same laws. This effectively allowed the CCP to frame the issue as 'China vs Foreign" (we need to compete on the global market place!) rather than "public vs private" which delegitimizes Communist Parties.
 

RousseauX

Donor
Critically, let us explore what would have happened if the collectivisation process had been reversed. We take the agricultural sector and split up the mass state farms into a large number of privately owned 'farm collectives' rather than produce what the state tells them to produce, they are instead allowed to produce what they deem the soviet bloc needs, these foodstuffs then being allowed to be 'traded' as supply and demand dictates.
This is basically what happened in China (with the household as the basic economic agricultural unit) with the added caveat that the state demanded a certain amount of production from the farmers to keep grain prices steady, and farmers are free to grow whatever they want after that, this enabled China to avoid the worst social costs of transformation by making the transformation gradual.

This process is followed by the manufacturing industries quickly thereafter.

In doing so the 'centrally planned economy' gets turned into 'the peoples planned economy' whereby the workers and not the politicians are allowed to dictate the targets and choices for production.
In reality doing this in manufacturing isn't really different from shock therapy and what happened post-1991. But as long as there is a Communist party which wants to retain a political monopoly in the USSR it is doubtful this would happen since the urban state sector forms too much of the base of power for the Communist party. It's pretty much inevitable that the CPUSSR do the same thing the CCP did OTL, which is to hold onto the large "commanding heights" of the economy at the cost of massive inefficiencies.

Only China was able to generate a large amount of new industries through labour intensive low-cost manufacturing, I'm not sure if the USSR can do the same. China's strategy was to "grow out of the plan": the old state industries would be allowed to remain under the planned economy for decades while new industries created would not be part of the planned economy. The issue here is that this requires the sort of economical growth not viable for middle-income countries.
 
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This is basically what happened in China (with the household as the basic economic agricultural unit) with the added caveat that the state demanded a certain amount of production from the farmers to keep grain prices steady, and farmers are free to grow whatever they want after that, this enabled China to avoid the worst social costs of transformation by making the transformation gradual.

In reality doing this in manufacturing isn't really different from shock therapy and what happened post-1991. But as long as there is a Communist party which wants to retain a political monopoly in the USSR it is doubtful this would happen since the urban state sector forms too much of the base of power for the Communist party. It's pretty much inevitable that the CPUSSR do the same thing the CCP did OTL, which is to hold onto the large "commanding heights" of the economy at the cost of massive inefficiencies.

Only China was able to generate a large amount of new industries through labour intensive low-cost manufacturing, I'm not sure if the USSR can do the same. China's strategy was to "grow out of the plan": the old state industries would be allowed to remain under the planned economy for decades while new industries created would not be part of the planned economy. The issue here is that this requires the sort of economical growth not viable for middle-income countries.

BUt does it? Require high levels of growth? Sure 10% a year is great, but that doesn't mean 4% a year is a waste of time.

And could you not get a exception made for a few areas of the economy for healthy, real reform and growth?

Say, the export oil and gas industry for a start?
 

RousseauX

Donor
BUt does it? Require high levels of growth? Sure 10% a year is great, but that doesn't mean 4% a year is a waste of time.
You need a high rate of economic growth in order to build a private sector economy which will be independent the state sector without dismantling the state sector directly: doing so is impossible due to political reasons. Without building new private sector or semi-private sector industries (which was one of the most successful part of China's reform) you are stuck reforming the old state industries as the Soviets did OTL

A slower rate of growth means proportionally slower reform process, first of all, you need to figure out how this growth is achieved outside the agricultural sector, and second of all, if its slow enough it's not really -that- different from what happened OTL. Which is to say the bulk of your economy is still incredibly inefficient.

And could you not get a exception made for a few areas of the economy for healthy, real reform and growth?

Say, the export oil and gas industry for a start?
The issue is pretty simple, as long as you retain the gigantic state owned conglomerates you are going to have incredibly inefficient entities making up your economy. At the same time you cannot rapidly dismantle those same industries (i.e IIRC China only allowed private ventures into oil fair recently, decades after reform began) due to political reasons (there would be too much pushback against it), and economic reasons (possible loss of revenue, price instability).
 
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