Transcript Calgary EDSU Lecture Master

Introduction
A Journey of Choices
• Opportunity cost – the benefits of the foregone
(next best) alternative
The Economic Demise of the Soviet Union
Choosing
Is
Refusing
1917
• 3% literacy
• serfdom
• just beginning to
industrialize
• Wealth held by
Romanovs
1921: New Economic Policy (NEP)
“We are taking one step backward in
order to take two steps forward.”
farmers’ market
Results: Five Year Plan, 1928-33
Benefits:
Burden on consumer:
• Urban electrification
• New towns, factories, mines
• Growth outpaced West (Great
Depression)
– 48% increase in GDP
1928-33
– 113% increase in producer
goods output
– 227% increase in electricity
• Slow growth in consumer goods
– increase of 1%
– food rather than other consumer
goods
• Livestock production fell 8%
Step 1: “de-kulakization”
A parade under the banners
"We will liquidate the kulaks as
a class" and "All to the struggle
against the wreckers of
agriculture.“
http://www.yale.edu/annals/siegelbau
m/images/siegelbaum_photos.htm
"Endless fields of people - women, children, old people - and
universal wailing. They were being loaded on to cattle trucks to
be sent off to Siberia.
I was there for fifteen minutes and I asked the station master
there, ' What's this? What's happening here?' and he said, '
What's up with you? Have you just landed from the moon or
maybe you've just arrived from Persia? This is the
collectivisation and the elimination of the kulaks as a class.'
And it turned out there were so many people, and not enough
trains that, with the cold weather, people were literally just dying
there .”
https://whewert.wikispaces.com/5-Focus+3
The Economic Demise of the Soviet Union
Nazis Invaded USSR, June 1941 . . .
and . . .
. . . lost the war
German POWs in Moscow
USSR: world power
Choice: nuclear weapons program
“Lightning 1”
1st Soviet
atomic bomb
test
1949
“Joe 1”
1st Soviet
atomic bomb
Choice: education
1950s - “Golden Years” of the Soviet Economy
Period
Avg annual %
growth GDP
1940-50
2.2
1950-60
5.2
1960-70
4.9
1970-80
2.5
1980-85
1.8
1986-90
1.3
SOURCE: Ofer, 1987; Laurie Kurtzweg, “Trends in Soviet Gross National Product” in
United States Congress, Joint Economic Committee.
Gorbachev’s Economic Plans, Vol. 1, Washington D.C., pp. 126–165; James Noren and Laurie
Kurtzweg, “The Soviet Economy Unravels:
1985–91” in United States Congress, Joint Economic Committee. The Former Soviet Union in
Transition, Vol. 1, Washington D.C. pp. 8–33,
1993; Angus Maddison. Monitoring the World Economy 1820–1992, OECD, Paris, 1995; Angus
Maddison, The World Economy : A Millennial
Perspective, OECD, Paris, 2000.
The Economic Demise of the Soviet Union
“Thaw” in the Cold War
Khrushchev’s U.S. tour
Yale
University
Choir in Red
Square after
Lacy Zarubin
Agreement
The Economic Demise of the Soviet Union
the “Secret Speech” - 1956
“On the Cult of Personality and Its Consequences”
•called for return to Leninist ideals
• begins the “de-Stalinization” of the USSR
•Denunciation of Stalin’s military and party
purges
•Note: did not denounce coercion of
populace used to advance the interests of
the party and the state
Twentieth Congress of the
Communist Party of the
USSR
The Economic Demise of the Soviet Union
Leonid Brezhnev: 1964 - 1982
The Economic Demise of the Soviet Union
“Good Ol’ Boy” Communism
Brezhnev opened the
Olympic Games in
Moscow, 1980 to showcase
the Soviet Union to the
world
Brezhnev years characterized by
emphasis on image and Soviet
prowess on the world stage, while
ignoring serious underlying
problems in the Soviet economy
The Economic Demise of the Soviet Union
Behavior encouraged by Output Target Incentives:
• Characteristics of Factory
Directors:
– anti-innovation
– risk-averse
– hoarder
– defend status quo
– understate capacity
– overstate (ratchet)
resource needs
The Economic Demise of the Soviet Union
tolkachi – procurers of production
supplies by trading with other
factories hoarding misallocated
supplies, or through the black market.
no bridge from invention to innovation
• Invention:
new knowledge or ideas
• Innovation:
application of knowledge to
production
BZ1-C Redline C-Core Baseball Bats
The world's best baseball bat: patented Carbon Core
technology combines
Easton's exclusive Sc500 Scandium alloy walls, the
strongest in the game, with
carbon graphite reinforcement, resulting in the thinnest
walls ever without sacrificing
durability.
Extended barrel for maximum hitting area.
Alloy: Sc500/graphite
no bridge from invention to innovation
• Invention:
scandium alloy
•
Innovation:
baseball bats
bicycle frames
Scandium alloys were first made commercially available in 1996 by the Ashurst Technology
Group. Easton Sports first used Scandium alloys in February 1997, the product was the
Redline C-Core bat.
http://www.precisiontandems.com/eastonscandium.htm
The Economic Demise of the Soviet Union
End of the Brezhnev Era
Yuri Andropov
November 1982 – February 1984
Konstantin Chernenko
February 1984 – March, 1985
The Economic Demise of the Soviet Union
Mikhail Gorbachev 1985-1991
The Economic Demise of the Soviet Union
The Demise of the Soviet Union - 1991
Major blows to citizen support
of the Soviet regime:
• Reagan’s presidency
• Afghanistan
• Chernobyl
The Economic Demise of the Soviet Union
Reagan: On-going Challenge
Strategic Defense Initiative (“Star Wars”)
“The Soviet Union is an Evil Empire, and Soviet
communism is the focus of evil in the modern world”
March 8, 1983
The Economic Demise of the Soviet Union
Afghanistan: Dec. 1979 – Feb. 1989
Soviet casualties:
Killed: 15,000
Wounded: 30,000
# Served: 600,000
Avg Troop strength: 100,000
The Economic Demise of the Soviet Union
Chernobyl Nuclear Accident: April 26, 1986
The Economic Demise of the Soviet Union
Message: they don’t care about us
Gorbachev’s Reforms: Glasnost & Perestroika
Glasnost
Solzhenitsyn in
gulag, 1953
• political “opening”
– allowed dissent
– ended party monopoly of
elected regional & local offices
– greater regional representation
– encouraged social research
– admitted social problems
despite Gorbachev’s
invitation,
Solzhenitsyn didn’t
return to Russia
until 1994, 20 years
after being exiled
The Economic Demise of the Soviet Union
Gorbachev’s Reforms: Perestroika
Perestroika
• economic “restructuring”
– allowed some private
(cooperative) business
– some decentralization
of control over state
production
The Economic Demise of the Soviet Union
Russian Dissident & Chess Champion Wins Human
Rights Award
Garry Kasparov to Receive UN Watch Prize
at League of Nations Hall in Geneva (April 2013)
“Gorbachev had as much to do with the fall of the
Soviet Union as Louis the XVI had to do with the
French Revolution.”
August, 1991
Boris Yeltsin declares Russia’s
independence from the USSR
The Economic Demise of the Soviet Union
1940 Katyn Forrest Massacre
”I was dumb; I believed it all.
I would have given my life for
the Motherland.” *
The Economic Demise of the Soviet Union
*Lenin’s Tomb
by David Remnick