The Rise and Fall of the Soviet Economy

The Soviet economy was the second largest and arguably, the second most successful economy in the 20th century. At its heights it has a GDP of $2 trillion, and it was a self-sufficient economy that produces its own fuel, machinery, consumer goods, food, etc.

The Soviet economy had an annual GDP growth of 5% for 42 years long (meaning that they outperformed all countries in the 20th century except for Japan), and it grew from a poor country wrecked by famines and civil wars into a power that rivaled the United States. But of course, it has entirely collapsed.

Now, the standard criticism of the Soviet economy is that socialism could have never worked, and it was a big mistake to try this system in the first place.

And while there are certainly many things wrong with the Soviet Union, the fact that they managed to grow rapidly and turned a nation with extreme poverty to become economically sufficient must mean that they’ve done something right. Even other poor nations with little to no hope of growing like China and Vietnam eventually embraced the Soviet economic system, with varying results.

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#Soviet #Economics #Doverhill

about economics explained, about Finance and how money works, on the rise and fall of the soviet union, This is an economics/finance video

[siddude]

The soviet economy grew because Soviet Russia moved from a pre-industrial, agricultural based economy to an industrialized economy. It came from a low, low base. But it was highly distorted and inefficient. This analysis is very superficial.

[RememberingWW]

It's amazing that a bunch of bureaucrats who never owned businesses tried to set prices based on years of data when price is determined by supply and demand and changing every second.

[hoodvaavdooh]

USSR 1929 Economic Environment:
1. Recovery growth in 1921-1928; 1913 figures exceeded (national income grew by 19%, industry, by 32%, agriculture, by 33%, fixed assets by 36%).
2. Sanctions: The country had not yet been recognized by many countries. They refused to accept gold as payment. The country was suffering from a credit blockade. Anti-dumping sanctions and embargoes: USA (1930), France (1930), England (1933).
3. External public debt and reserves: Debt more than $350M to U.S. private companies. Total reserves comprised $150M, including 138 tons' worth of gold reserves.
4. Modern industries and technologies: No competencies or technologies in contemporary economy sectors, including machine tool construction, non-ferrous metallurgy, chemical industry, aviation industry, automobile industry, agricultural machinery production, tractor industry.
5. Life expectancy: 43 years. Low-level healthcare and education systems. Population: 154M people.
- - -
USSR 1929-1955 results:
1. The largest economy in Europe and the second largest economy worldwide. The economy grew 14 times, by 13.8% annually on the average (the war years excluded). The country was the world leader in terms of economic growth in the 20th century).
2. External public debt: None. Gold reserves: 2, 050 tons (ranking 2nd in the world).
3. World's leader in mechanical engineering in industrial production (100% technical and economic independence has been achieved);
1st in the world in terms of agricultural mechanization;
1st in Europe in terms of the absolute size of industrial production;
1st in Europe and 2nd in the world in terms of labor productivity in industry.
4. New world-class industries: nuclear, space, rocket, aircraft, professional equipment, radio, electronics, electrical equipment, chemical, machine tool construction, etc. The Russian economy has the youngest engineering and manufacturing system in the world.
5. Personnel: world-class school, education and healthcare are high-quality and affordable.
6. Life expectancy increased by 26 years. Population grew by 46M people, reaching 200M.
Real income grew over 4 times. People's deposits in savings banks increased more than 5-fold.

[colin]

'Why did it succeed and then fail?' For the same reason as why capitalism first succeeded and is now failing. It's the law of life.

[DavidVersace-mmkd]

Central planners can usually do OK at heavy industrial investment that is catch up growth where they can copy capitalist existing business models.

But by the 1970s heavy industrial investment wasn't driving economic growth. Small scale innovation in services, technology, and consumer goods was. Central planners could not keep up with what the capitalist economies could do in these areas.

[matthewwiemken]

Soviet Union was too focused on issues with the west and had little diversity in its economy.

[obi]

The best explanation i ever got was from a woker "they pertend ro pay us and we pretend to work"

[ezrawilson]

Excellent video, informative and well presented

[Steven_Edwards]

Western Oil money also helped for a lot of decades, that regular injection of foreign currency helped paper over the misallocation of resources from state control.

[robertortiz-wilson]

The Soviet Union finished third in a two country race.

[TheDavidlloydjones]

Under Hoover? 1, 000, 000 Model T Fords at $380 apiece. $.38 billion.
Under Stalin? 1, 000 tanks at $1, 000, 000 each: a billion, two and a half times as productive!

[TheNodrokov]

Thanks for making this! It's so hard to find good impartial resources on the Soviet Economy, most videos I've seen are heavily biased one way or the other -- but this was a good facts-based video that acknowledged both the flaws and successes of the Soviet system.

[chrisd]

Many congratulations for your video. A huge factor contributing to the fall of the Soviet economy along with the points you raised was the Chernobyl disaster which cost hundrends of billion of dollars.

[davidkuperman]

Soviet Union had no economy. It was always oil and natural gas. The machinery that they used to extract both was licensed from the West. The pipeline was financed by the West and constructed with Western-built equipment. The proceeds from oil and natural gas sales were used to purchase grain from the United States to avoid a full-blown famine. Yes, quite a success story 👏

[twisted_void]

Such a resource rich country, would have developed and grown irrespective of political system.

[wxvzvny]

If they didn't have to spend a massive amount of their wealth to found the army the USSR would be alive and kicking. The USA wanted anything that was different form capitalism to fail cos they were scared that socialism would succeed in the US too.

[harlequin_yt]

Thanks! I didn't know much of this history.

[Orbaj]

Great video, thought you presented such a complex topic with great flow. Kept it short and sweet while hitting some important marks. Keep it up. Assumed this was a bigger channel haha

[Realgeo.comrade]

Hi can i know the application you use for your video editing

[iainmclaughlan]

The government should just leave people be to do what they want and make their own economy