the early 1990s, as a result of Gorbachevís self-styled economic
reforms, the Soviet economy was in worse shape than in 1985. Freed
from some of the coercive pressures of the past, the system of
central planning eroded without adequate free-market mechanisms to
replace it. In an environment of universal shortages and general
confusion, state enterprises used their newly found freedom to
reduce planned output, to drop low-priced products from production,
and to raise prices under the guise of new products. All this added
to inflation and exacerbated the perennial shortage of consumer
goods. Empty shelves, longer lines, and increased distribution
through special channels and on the black market became widespread.
Because there was no longer effective control from Moscow at the
republic and local levels, rising nationalism, ethnic strife, and
regionalism fragmented the economy into dozens of mini-economies.
Many republics within the Soviet Union sought independence, others
sovereignty, and they all pursued policies of economic
self-isolation. Barter was widespread. Goods and food rationing
systems had to be set up: Ukraine introduced coupons, and Moscow
issued ration cards. By 1990 the Soviet economy had slid into
near-paralysis, and this condition foreshadowed the fall from power
of the Soviet Communist Party and the breakup of the Soviet Union
itself into a group of independent republics in 1991.
Gorbachevís economic strategies were largely to blame for the
disappointing record of perestroika. His intention was to switch to
intensive economic development by adjusting the traditional pillars
of the Soviet economic system. After an initial flush of enthusiasm,
the task of accelerating economic growth by adjusting the
centralized planning system proved to be far more difficult than
anticipated. Reform measures were introduced without investigating
the roots of Soviet economic difficulties and the reasons why
similar reform attempts in the past had failed. Decades of falsified
statistics and creative accounting to simulate nonexistent successes
had created a situation where even the top Soviet leaders themselves
did not have a true picture of the condition of the national economy
and the severity of its crisis.
Gorbachev acted out of a firm conviction that the ideological and
economic foundations of the Soviet system were fundamentally sound.
It would be naive to expect a convinced Communist to advocate
liberal economic policies, such as breaking the monopoly of state
ownership, withdrawing state subsidies from unprofitable
enterprises, allowing genuine market competition, and giving land to
peasants in their private ownership. Moreover, radical proposals of
this nature would have never received the approval of his Politburo
colleagues: a Soviet leader who espoused such views would have been
regarded by them as worse than the dissidents and would have risked
being locked up in a psychiatric hospital.
Gorbachevís attempt to renovate socialism was limited to tinkering
with the old system that only deepened its general crisis. By the
end, perestroika had reached the stage of a total economic
breakdown, with deficits and social upheavals. The goal of creating
a socialist regulated market economy, able to satisfy consumers and
close the technological gap with the West, was not realized.
However, the abysmal economic record of perestroika did achieve one
thing: it appeared to demonstrate the impossibility of rejuvenating
the Soviet model of socialism, pushing it to its final collapse.