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END of the COLD WAR and the SOVIET UNION (2 of 9)

Leonid Brezhnev, 1936

He feared the capitalist powers
more than would Communist
Party boss Mikhail Gorbachev.

From the 1960s a shift had been taking place in work. It was more toward the production of consumer items such as automobiles, electronic devices, pharmaceuticals, civilian aircraft -- a production that was more knowledge intensive, more plastic and less cement. And it was more production for consumers -- away from the kind of heavy industrial production that had developed under Stalin.

From 1966 to 1970 under Leonid Brezhnev the Gross National Product (GNP) grew at a rate of around 5.3 percent per year. Then during 1971 to 1975 the growth declined to an average of 3.7 percent per year. And after 1975 the GNP fell to a growth of between 2.6 and 2.7 percent per year. In these years production around the world was growing rapidly, rising to an average annual rate for the world of 6.2 percent in 1973. The Soviet Union was keeping up with the United States in the production of steel, pig iron, cement and oil, but the future lay in electronics and specialty chemicals. [note]

Brezhnev and his colleagues wished Soviet citizens to be as prosperous as those in the capitalist nations, and to produce more for consumers they tried to incorporate innovations from the West, including innovations involving chemicals and computers. The Soviet Union was not keeping up with sophisticated techniques in computers, software and communications electronics or the design and manufacturing of automobiles -- as were Taiwan and Korea. The Soviet Union lost its second place standing in manufacturing, falling behind the losers of World War II, Japan and Germany, and falling behind Britain and Italy. The Soviet Union's biggest customer for its manufactured goods was its military, and manufacturing for the military continued to use the Soviet Union's most skilled people, to the detriment of production for civilians.

The rigid command economy created by Stalin in the 1930s was not suited for the rapid changes that were a part of technological development outside the Soviet Union in the 1970s. The Soviet Union had no independently wealthy individuals looking to bankroll a new business with a new idea. In the Soviet Union it was the central government that was doing the investing, not only in the military but also in social programs, including spending money to keep bread available and at a low price. Money to modernize manufacturing was often lacking.

In the Soviet Union, the managers at various production plants were protected from international competition, and they had no competition from within the Soviet Union. Their thinking was not geared to consumer choice, and without a free market they had little notion of what was in demand and what was not. Rather than consumers, bureaucrats were deciding what was to be manufactured. And at the center of the Soviet economy, planners could not keep up with the changing needs of various areas, which resulted in poor economic co-ordination, sometimes seen in the form of metal goods rusting away at railway sidings.

By the 1970s, low morale of the Soviet Union's work force was hurting its economy. Workers were given goals that seemed abstract or remote from tangible benefits. Common people were criticizing people in power for not responding to their needs. Common people still lived in cramped housing and were seeing little material progress for themselves. Cynicism was high among Soviet workers and alcoholism prevalent. People were taking less pride in their work than people did in some other nations.

Skilled workers were also demoralized. The massive effort in the Soviet Union in education to create a skilled work force could not compensate for an economy that functioned poorly. Instead, education was producing poorly employed talent.

The agricultural sector of the Soviet economy was also functioning inefficiently. Under Brezhnev, most farming remained collectivized, with four percent of the Soviet Union's arable land being farmed on the side, as privately owned plots -- with this four percent producing around twenty-five percent of the Soviet Union's agricultural output. Before World War I, Russia had been one of the greatest food exporters in the world, but now it had become one of the world's greatest importers of food. After decades of collective farming, agricultural workers in the Soviet Union had developed poor work habits. And with distribution and transportation a problem, some harvests rotted on their way to market, and sometimes as much as forty or fifty percent of a crop might rot in the fields.

During the Brezhnev years supplies of oil and natural gas were becoming more costly, these supplies now deeper in the ground or located in permafrost regions. The Soviet Union had not been using its energy efficiently, and scarcer supplies of fuel were now adding to the cost of production.

A decline in sales of its oil abroad and the purchasing of food from abroad was a trade imbalance that was costing the Soviet Union hard currency and gold. Within the Soviet Union, government agencies were involved in more deficit spending than bureaucrats were admitting. And increases in the printing of money were contributing to the declining value of Soviet money -- the ruble.

What grew during the Brezhnev years were bureaucracy and the size of the Communist Party -- with many Party members working in bureaucracies. And growing too were the number of vacation residences, pensions, perks and privileges for Party members. In the eyes of the common Soviet citizen, corruption was growing alongside economic stagnation. According to Business Week (1-20-09), Brezhnev contributed to the ruination of the Soviet Economy by not having started reforms in the early 1970s.

And the Brezhnev years included aggressive moves to defend the Soviet Union's position with its neighbors. Brezhnev was concerned that the Communist regime in Czechoslovakia was becoming too liberal -- the Communist leader in Prague, Alexander Dubcek, having talked of creating a "socialism with a human face." Brezhnev saw Soviet hegemony in East Europe as threatened. He spoke of all the sacrifices that the Soviet people had made in World War II and, in August 1968, he sent tanks into Czechoslovakia to quell liberalization.

Brezhnev wanted to maintain the Soviet Union's standing in Europe and to maintain good relations with the West. He made himself a champion of Détente, and as a sign of his desire for good relations with the U.S. he kissed President Carter on the cheek. Then in December 1979, Brezhnev sent troops into Afghanistan, to support a friendly socialist regime there against guerrilla insurgents.