Globalisation and the Soviet Union

Index

1.  Introduction  

2.  From the Bolshevik uprising to Stalinism (1917 1950 )  

3.  The era of stagnation  

4.  Impacts of globalisation and the Gorbachev era  

5.  Shock therapy and the IMF  

6.  Conclusion  

7.  Bibliography  

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This essay aims at explaining the impacts of the processes globalisation on the fall of the Soviet Union and the problems this created for the new Russia in transition.

First of all it is necessary to look at some parts of the history of the Soviet Union and the nature of Communism before moving on to defining globalisation and its effects on Russia and the Commonwealth of Independent States (CIS). Why is it so important to deal with history first? It is because the former Soviet Union economically and ideologically had shut itself off to most parts of the globe for decades and hence the effects of globalisation must be reflected under the light of these specific circumstances.

In short, the Bolshevik uprising in 1917 was successful and brought the Bolshevik Party into power which was renamed Communist Party in 1918. In the years from 1918 to 1921 a civil war followed in which the Bolshevik regime was almost overthrown but managed to stay in power, taking control over the economy and turning it into a war economy. After 1918 the Soviet Union experienced three years of war communism. Under the wing of Socialism the economy was organised in a military sense and forced the whole nation to put their labour into keeping up a traditional army and securing military power. ¹ In 1921 Lenin introduced The New Economic Policy as he realised that war communism was a failure and that it had led to peasant revolts endangering the Soviet State. The idea now was to maintain industry under state control and to allow a market for agriculture, trade and commerce. ² This system made it possible for peasants and rural capitalists to gain relative wealth whereas the urban population experienced increasing unemployment. By the late 1920s this emerging rural capitalism was regarded as a threat to the system and lead to a very fragile relationship between the Communist government and the rural population. In order to avoid the collapse of Communist Soviet Union, Stalin implemented mass collectivisation of agriculture and rapid industrialisation. ³ Now the government was taking over the whole economy and what

¹ David Christian, Imperial and Soviet Russia: Power, Privilege and the Challenge of Modernity, Macmillan Press, Houndsmills, 1997, pp.207 - 231.

² David Lockwood, The Destruction of the Soviet Union, Macmillan Press, Houndsmills, 2000, p.66.

³ David Christian, Imperial and Soviet Russia: Power, Privilege and the Challenge of Modernity, Macmillan Press, Houndsmills, 1997, pp. 262 & 265.

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emerged was the Soviet war economy par excellence. The role of the state had increased again and the country was permanently militarily mobilised. In order to be able to keep up an extremely high military standard to defend the Soviet union and Communism, industrialisation and technology had to be pushed forward extensively. Indeed, that military force was needed when Hitler attacked the Soviet Union in June 1941. After World War II ended in May 1945, Stalin rebuilt his warstruck country in accordance with practices previously used throughout the 1930s. Again the focus was on extensive rather than intensive growth and, amongst other things, led to crisis from the 1950s onward.

After Stalin died in 1953 the successive leaders found the country’s economy in a relative mess to the rest of the world. Khrushchev started reforms to achieve de-Stalinisation and began decentralisation and economic planning. When Khrushchev got voted out of the Politburo in 1964, Brezhnev became general secretary and what followed were about 20 years of stagnation. Instead of introducing major reforms his regime relied on the Communist system and hoped that it would achieve a performance good enough to keep the Soviet Union stable. 4

This strategy did not succeed as a declining birthrate and an increasing difficulty in accessing natural resources required a change from extensive to intensive industrial growth and improved technology was required to increase production levels. An important means of improving the situation was importing technology from countries outside the Soviet Union and the Communist block. 5

This is where the importance of globalisation comes in. So far, the Soviet Union had operated as an autarkic state completely focussing on its military and industrial growth, total state control and self-sufficiency. The economy had been kept within the Soviet borders and had to rely on its own resources with heavy industry as the main means for industrialisation. Meanwhile a good part of the rest of the world had been thriving through increased investment and commerce, and globalisation had taken technology further, using a pool of resources from many different countries. One important process of globalisation is a global

⁴ Paul R. Gregory & Robert C. Stuart, Soviet and Post-Soviet Economic Structure and Performance, HarperCollins College Publishers, New York, 1994, p. 136.

⁵ David Christian, Imperial and Soviet Russia: Power, Privilege and the Challenge of Modernity, Macmillan Press, Houndsmills, 1997, pp. 293-375.

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