Soviet Economic System | Planned Economy in USSR

The planned economy people had back in the USSR was completely different from what we experience today. Here are some realities and challenges this economy used to face.

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As with several narratives describing the Soviet Economic System - the Planned/Command/Central Economy here's a list of several aspects that are either deliberately left out or missed due to lack of investigative research.

1. When claiming that the Soviet economic system failed there is an implication to justify that Free-Market Capitalism is the only better for an economic system because it has continued to exist and prosper. This implication is grossly misleading for a multitude of reasons listed below:
1.1. Free Market Capitalism experiences frequent market crashes, recessions, and burst bubbles. These market crashes or recessions are now branded as market corrections. In reality these market corrections are controlled by those in power of capital consolidated with them, namely investors, politicians with vested interests, banks, financial institutions, corporations etc. Every time a recession happens corporations and investors go on buying sprees to buy up land, resources, and other assets for a much lower price under the idea that the original price was overvalued.

2. The idea that innovation was stifled under the Soviet economic system and thus the implication that planned economic systems stifle innovation is misleading. Markets and consumer demand cannot keep up with the pace of rapid innovations. In the Free-Market Capitalist system consumer demand is artificially stimulated through bank loans, discounts, subsidies. This artificial manipulation of market demand leads to inflated bubble that in turn drives an entire supply chain. Once the driving force pulls the plug i.e., financial institutions stop bankrolling the entire supply chain collapses and the bubble pops.

3. The Soviet economic system, built on the idea of a planned economy was modelled with the idea to prevent market scams, bubbles, crashes, uncontrollable recessions, inflation, the increasing gap between income and cost of living, and preventing the accumulation of capital/resources in the hands of few who end up holding the entire country and population hostage. The Free-Market Capitalist economy has demonstrated the exact predicament that the Soviet economic system was built to prevent.

4. The Soviet economic system did not fail or collapse. An artificial recession and market manipulation was created in the mid 1980s 'the oil glut'. American companies handed back the oil wells to the Saudis, and instrumented the creation of OPEC. OPEC did not collaborate with world's second largest producer of oil at the time i.e. USSR and pumped a lot of oil which drove down oil prices, and precipitated the aviation, hospitality, and tourism industries. Oil was a significant contributor to the Soviet economy's revenue. The loss of oil-based revenue led to economic downturn. Most images that are shown of people lining up to empty stores are from the late 1980s and not prior to the 1980s when commodities were stocked.

5. The dissolution of USSR is not the same as failure or collapse of a model. USSR was dissolved because of political deception where Gorbachev took decisions against the consensus of the Soviet politburo as a personal ambition to appease the West, build closer ties, and reduce development of WMDS. The bait that Regan threw at Gorbachev was that USSR and the Warsaw Pact is a threat to world peace and that those need to be dismantled, and elections need to be held in the Eastern bloc. This coincided with CIA buying up politicians in Eastern Europe to organise protests to show that the Communist system was not working, and they wanted to be 'unshackled' from the Soviet bloc. Because of mistakes by Gorbachev against the recommendations by the Soviet senate a mini civil war erupted. These series of events are manipulated to mislead the understanding of the public, who are naive enough to take it at face value because of the effort it may take to investigate.