The Economic Transformation of the Soviet System in the 1980s and 1990s: the Sources of Capital and Power

Abstract

The author considers the reasons for the economic crisis of the USSR and the Soviet economic policy, starting with the reform attempts of the 1960s and up to the era of perestroika. The hyper-monopolized Soviet economy was gradually losing control and finally came to its complete bankruptcy. The paper shows the inconsistency of the theoretical foundations of the reforms of the early 1990s, as opposed to the real steps actually taken by the Russian authorities and developed through economic self-organization. The reforms essentially boiled down to the drastic reduction of government spending and the opening of the national markets to foreign corporations. Then the further evolution of the economic system and the system of state regulation is discussed when large economic organizations were restored and the national financial system was strengthened.