The Cold War: Economic Trends--Basic Failure of Soviet Socialism

Figure 1.--Here we see two Soviet children in the 1960s in front of an inspirational poster proclaiming that "Peace will Win!" This is interesting given the huge Soviet military expenditures and Soviet occupation anfd military actions in Eastern Europe. Noitice the cranes (signifying building activity) in the backgroind. In fact, Soiviet cities were grey and dingey compared to the gleaming modern cities of the West. Even more interesting is the depiction of the worker--depicted as a hero. The problen is that because of socialism, Soviet workers were extrofinarily inefficent. And in contrast to the glowing image depicted, Soviet workers were very poorly paid and lived in poverty compared to the propsperous workers in capitalist Western Europe and America. The difference is that socialism destroys wealth and capitalism creates wealth.

Stlin and other Soviet leaders were convinced after World War II that vthey would win an economic competition with the West because they believed that Socialism was based on scientific principles. Only the Western capitalist states prspered after the Warr while the Soviert Union lagged behind. Soviet indusdtrial workers were only paid a fraction of Western workers. And the workers on the collective farms faued even worse. There were reasons fior this. It is not that Soviet officials did not want to pay workers decent salaries. On factor was that Soviets officials commited a huge portion of the economy to military spending. There are a rangev of reasons why the Soivuet economy was so unproductive. Socialism was such a failure, but it all came down to to thev simple back that Sicialism is inherently inefficenct. The Soviet Socialist economy was so inerfficient that it did not produce the income needed to pay workers decent salaries. Incredably, the value of the products manufactured in Soviet factories were actually worth LESS than the manufacturing inputs (labor, raw material and energy) that went into their factories. Soviet mnufctureing actually destroyed value. There was no price disdcivery (accounting) in the Soviet Union. Factory manufacturers requested needed raw materilas and they were delivered. There was no assessment as to the value of the manufactured produced. Or comparison with the value of the raw matrials delivered. This is the primary reason meant that countries with Socialist economies could not afford to pay workers the high salaries that capitallist corporation in the West could pay. Nor did they have free trade unions that could engage in real collective bargaining. There were unions in the Soviet Unioin, but the unions were controlled by the state, the same state that owned and operated the factories. A standard Soviet joke was, "They pretend to pay us and we pretend to work." One authior explains, "This half-serious summary of communist economics contained a kernel of truth: for Soviet workers, the freedom to pilfer and dawdle made up, to some extent, for empty shelves and wretched wages." It is thus not surprising that badly paid workers tuened against the socialist werkers paradice. This began early on with East German workers, but erre brutally supressed (1953). Finally Polish workers organized Solidarity--the first free trade unioin in the Soviet empire. Solidarity was able to confront Communist control (1980s). The whole Soviet system began to unwravel after Polish industrial workers began to strike, demanding decent wages (1980). Industrial workers were suposed to be the bulwark of the proletarit supporting Communist governments. Poorly payed workers were central in bringing the system down.

Created: 1:01 PM 10/20/2021
Last updated: 1:01 PM 10/20/2021