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Category 3: Essay
Critically evaluate the intentions and outcomes of the projects for Soviet
economic reform undertaken by Khrushchev and Gorbachev.
After Stalin's death in 1953, a wave of new thinking Soviet leaders emerged,
seeking to change the basic economic and political structures which Communism
was based on. Nikita Khrushchev and Mikhail Gorbachev both pursued reformist
policies during their respective periods as heads of the Communist Party of the
Soviet Union (CPSU). Although their policies were different in substance, the
political problems they faced in executing reform were quite similar. In this essay
I shall be evaluating the intentions and outcomes of Soviet economic reform
undertaken by Khrushchev and Gorbachev, and asking fundamental questions
such as why did Gorbachev succeed in radically transforming the Soviet Union
before he was removed, while Khrushchev was ousted before he could achieve
long lasting change to the system? Before I begin however, I believe it's
important to understand the definition of a reform in this context. In J.
Thompson's article he describes a reform as "deliberately undertaken to bring
about a significant alteration in the authoritative allocation of values within the
political system, therefore broadening access to the sources and instruments of
power and authority, but which nevertheless preserves the continuity and
identity of the regime." 1It's important to recognize that "there is no year in
which some change in the Soviet system is not introduced, and reform in the
Soviet Union is a continuous process." 2 However, "where Khrushchev and
Gorbachev stand out among Soviet leaders is in the wide range of issue areas
over which they introduced clearly reformist measures." 3 These reforms were
established on the basis of four basic concerns; balance, efficiency, innovation
and responsiveness to customers.
When evaluating Khrushchev's regime its fundamental to recognise his
intentions. Many regard Khrushchev's regime as a period of 'De-Stalinization'.
This refers to the process of eliminating the cult of personality and Stalinist
political systems within the CPSU. Khrushchev strived to achieve this by shifting
resources away from Stalinist priorities of extensive growth, of the military and of
investment for the sake of investment and "shifted priorities in favour of
consumerism"4. In February 1956, Khrushchev delivered a 'secret speech' which
he denounced the crimes committed under dictator Josef Stalin and the cult of
personality surrounding the deceased Soviet leader. Thus began this period of
1 W. J. Thompson. 'Khrushchev and Gorbachev as Reformers: A Comparison' in
British Journal of Political Science, Vol. 23, No. 1 (Cambridge, 1993), pp. 77-105.
(p78)
2 Ed. Hewett. 'Khrushchev to Brezhnev: Previous efforts at Economic Reform' in
Reforming the Soviet Economy: Equality verses Efficiency (Washington, 1988),
pp211-256. (p221)
3 Thompson, 'Khrushchev and Gorbachev as Reformers', p. 78.
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De-Stalinization when repression and censorship in the Soviet Union was
reversed and millions of Soviet political prisoners were released. "Khrushchev
was faced with pressures to raise the standard of living of the population and, in
particular, to improve the situation concerning agriculture and food supply.
Secondly, there were pressures from within the elite for greater physical security
and a greater degree of regularity in the management of the party and state."5
Khrushchev can be seen to be openly striving to accomplish 'material and moral'
reforms in the early stages of his regime. "He presided over a major shift in
resources towards agriculture, food production, the launch of a housing
programme, a large cut in armed forces and the easing of priority for heavy
industry. This was accompanied by the easing of censorship and a controlled
opening to the outside world."6 This all equated to shifting priorities towards the
consumer, which was a main intention of Khrushchev, and created the
foundations of his regime.
Khrushchev's early years were generally successful in dealing with economic
reform as GNP grew by 6.7% per annum between 1953-1958. Real income per
capita also rose 0.9% in 1955 to 5.9% in 1958. 7An example of significance can
be seen in the agriculture sector as "the official claim was that average real
incomes of peasants rose 68% from 1952-1958." 8 This can be put down to a
number of factors including the reduction and eventual removal of compulsory
deliveries from peasants household plots. In addition, the farm sector's gross
fixed investment rose from 11.8% from 1946-50 to 14.2% from 1951-55. 9 In
order to summarise the outcomes of Khrushchev's agricultural reforms it can be
suggested that "he improved incentives for farm production, by raising farm
procurement prices and lowering the tax burden , therefore improving Soviet
food supplies."10 However, the reform was achieved through raising imports on
food, rather than increasing the productivity of existing agricultural land.
Furthermore, the Virgin Islands Campaign was a costly shortcut to raising grain
4 P. Hanson. "Khrushchev: Hope Rewarded, 1953-1960' in The Rise and Fall of
the Soviet Economy: An Economic History of the USSR from 1945 (Harlow, 2003),
pp.48-69 (p50)
5 Thompson, 'Khrushchev and Gorbachev as Reformers', p 82.
6 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960', p. 50.
7 Hewett, 'Khrushchev to Brezhnev: Previous efforts at Economic Reform', p. 226.
8 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960', p. 54.
9 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960', p. 55.
10 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960', p 57.
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production, with dramatically fluctuating results. However, "on the whole,
Khrushchev's measures bought improvements in the material and moral welfare
of the Soviet people."11 Another specific example can be given with reference to
Khrushchev's housing construction programmes. The acceleration of housing
construction was drastic. Between 1946-50 the Soviet state constructed 127.1
million square metres of total living space, compared to 337.8 between 195660.12 Hanson nevertheless, suggests that" Khrushchev's policies in the field of
agriculture, housing and labour relations were benign, if not always well
designed."13 These reforms however, introduced no innovations in the structure
of the principal state institutions.
Khrushchev's reform efforts were characterised not so much by a sense of crisis,
but by a buoyant optimism concerning the future of Soviet society. In May 1957,
Khrushchev introduced, what most historians categorise as his most innovative
structural reform, the 'Sovnarkhozy' reforms in an attempt to combat the
centralisation and departmentalism of ministries within the CPSU. Many Russians
had become increasingly dissatisfied with the Economic systems and
performance under Stalin's regime due to the "substantial inefficiencies in the
operation of enterprises."14 Khrushchev responded to the political and economic
challenge by proposing the "devolution of power to control the economy to
regional economic councils...these changes resulted in a massive shift in power
from a much reduced central apparatus to approximately 100 economic
councils."15 In practise, "The reform was designed to eliminate departmentalism
within the ministerial system, replacing it with a rational division of labour
between regions that would lead to increased efficiency and reduced demands
on an overburdened transportation system.16 However, " Khrushchev was unable
to construct institutional arrangements that would permit him to maintain the
system of administrative socialism whilst avoiding both terror and
bureaucratization: his attempts to do so angered an apparatus which rightly saw
his goals as contradicting its own."17 Ultimately, Khrushchev's attempts at
adapting the structure of Soviet government was largely unsuccessful as Hewett
11 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960' p. 60.
12 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960, p. 64.
13 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960, p. 67.
14 Hewett, 'Khrushchev to Brezhnev: Previous efforts at Economic Reform', p.
223.
15 Hewett, 'Khrushchev to Brezhnev: Previous efforts at Economic Reform', p.
224.
16 Hewett, 'Khrushchev to Brezhnev: Previous efforts at Economic Reform', p. 225.

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argues "Sovnarkhozy resulted in a potentially disastrous move towards regionally
based autarky, divided into 100 or so 'economies'" 18 Furthermore, the aim of
improving efficiency within production was actually reversed as labour
productivity fell from 6.6% in 1957 to 4.4% in 1961 19These economic drawbacks
soon became apparent, as now government officials began complaining about
localism and called for the "need of a hierarchical management system to limit
transaction costs."20 Ultimately, these structural changes weakened
Khrushchev's own position and lost him support amongst the Central Committee
as Khrushchev appeared to be hamstrung by a lack of support and a track record
of failed economic initiatives. By the end of the 1950s, however, it was apparent
that the 'localism' to which the creation of the economic councils had given rise
was having a more harmful effect on the economy than the 'departmentalism' of
the old ministries. The later years of his rule witnessed a series of unsuccessful
attempts to restore central control over the economy. Nevertheless, Khrushchev
was the first Soviet leader to attempt to democratize the Soviet economic
system and address the daily economic hardships faced by ordinary citizens.
Khrushchev's policy of De-Stalinization and his reforms surrounding it did not
succeed at its most basic level, since the Stalinist legacy received a selective
rehabilitation after Khrushchev's era, but it did usher in a new type of style of
Soviet politics and enlighten the lives of many citizens as well as paving the way
for future attempts at reform.
In this section of the essay I shall discuss Mikhail Gorbachev's intentions and
outcomes for Soviet Economic reform whilst evaluating how he radically
transformed the Soviet economy in his period of leader of the CPSU until
Communism finally fell in December 1991. "When Leonid Brezhnev died in
November, 1982, the Soviet economic system was in need of a fundamental
overhaul. Economic growth had come to a halt and in many instances had
actually become negative."21 Figures suggest that between 1980-1985 Soviet
GDP had fallen to 1.7%. Khanin put's this down to deep-seated inefficiencies
within the command economy and the "radical deterioration of the moral,
professional, and physical characteristics of the labour force." 22 This information
is backed up by data provided in Khanin's article as he indicates "average
17 Thompson, 'Khrushchev and Gorbachev as Reformers', p. 86.
18 Hewett, 'Khrushchev to Brezhnev: Previous efforts at Economic Reform', p.
226.
19 Hewett, 'Khrushchev to Brezhnev: Previous efforts at Economic Reform', p.
226.
20 Hanson, 'Khrushchev: Hope Rewarded, 1953-1960, p. 60.
21 M. Goldman, 'Gorbachev and Economic Reform in the Soviet Union' in Eastern
Economic Journal, Vol. 14, No. 4 (1988), pp. 331-335 (p. 332).
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productivity of capital declined by 15%, and labour productivity fell by 5%
throughout the early 1980's."23 This declining of economic growth rates
eventually lead to the absolute decline of national income. "Those at the top
were enriching themselves, those at the bottom were stealing from the state and
drinking. Despair and apathy reigned in the society." 24 Gorbachev therefore came
to power at a time when the Soviet Union was facing large legitimacy problems
created from economic stagnation. He was acutely aware of how serious the
Soviet condition was. Once installed as General Secretary, Gorbachev moved
quickly to try bring order and discipline to the system.
The respective regime of Gorbachev has been substantially evaluated and
compared by economists and historians to that of Khrushchev. Both of their
intentions include reforms which aim at democratizing and liberalizing Soviet
society. However," Gorbachev ultimately demonstrated a willingness to go
beyond the role of a reformer and to become a regime transforming leader. He
was prepared to dispense not only with many old institutional structures, but also
with the regime's entire development strategy and with many of its longstanding goals."25 Realising what he had inherited, Gorbachev aimed at
revitalising and reenergising the Soviet society. "The Soviet Union's deteriorating
economic performance in 1985 was increasingly seen as a threat to its external
power and to many of the regime's domestic goals, but attempts to generate a
sense of urgency about the need for radical reform by creating an atmosphere
of crisis sounded initially as though Gorbachev was crying wolf. 26 However, he
introduced policies in order to try and achieve a well founded strategy of
economic and political change.
One of the most important policies Gorbachev introduced into the Soviet
Economy was a policy of glasnost, meaning openness. It soon became clear that
a significant shift in the dynamic of Soviet politics was taking place. It was the
process of Gorbachev attempting to harness the energies of the long suffering
masses through greater openness and democracy, to gain a better life for his
people. Glasnost's main goal was to make the nations management system
transparent and open to debate. Furthermore," Gorbachev sought, via glasnost'

22 G. Khanin. 'Economic Growth in the 1980's' in The Disintegration of the Soviet

Economic System. (London, 1992) pp. 73-85. (p. 73).
23 Khanin, 'Economic Growth in the 1980's', p. 79.
24 Khanin, 'Economic Growth in the 1980's', p. 79.
25 Thompson, 'Khrushchev and Gorbachev as Reformers'
26 Thompson, 'Khrushchev and Gorbachev as Reformers', p 93.
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and democratization, to mobilize and channel popular support for change." 27
This economic measure was no doubt intended to promote economic growth by
promoting democratization, privatization and decentralization of the economy,
which was coupled with political reform. Economic historian Carlyle advocates
one particular example, that the opening up of the Soviet economy lead to the
"removal of restrictions on cultural activities, such as the publications of books,
performance of plays and the exhibition of previously prohibited art certainly
made intellectual life more exhilarating and invigorating." 28 In effect, this bought
all negative aspects of previous Soviet rule into the spotlight and can be argued
to have disintegrating effects on society as it made many believe that the
foundations of Communism was built around falsehood. Thompson agrees as he
states " s glasnost' allowed the publication of materials which made it clear that
the economy was in worse shape than previously realized." 29
The second of Gorbachev's radical economic and political policies, aimed at
transforming the extremely poorly functioning Soviet economy was perestroika,
meaning restructuring. Perestroika is defined by historian Robert Grogin as
"designed to cure the economic inertia, overhaul the bureaucracy, the
Communist Party, and even the military, and so make the country more
competitive. The restructuring of the Soviet economy came to include a partial
reduction of the central planning system, the introduction of market
mechanisms, an emphasis on quality, the more efficient employment of labour,
and the infusion of new investment and technologies into industry" 30 When
Gorbachev initially introduced perestroika as his main economic policy, he drew
a parallel between it and Lenins New Economic Policy. By aligning himself and
his policies with Lenin, Gorbachev was distancing himself from Stalin by arguing
that the country needed to return to its Leninist roots. However, Thompson
disagrees as he suggests that "reform proceeded beyond De-Stalinization to
de- Leninization as Gorbachev and his colleagues sought to devise a new model
of socialism altogether."31 It is easy to draw comparison to Khrushchev's regime
here as both leaders were striving to guide Communist legacies away from
Stalinist ideologies. However, it is understood that Gorbachevs attempt at
renewing socialism, were doomed not only by tactical error but fundamental
contradiction. Grigorii states that "one error was the simultaneous adoption of
27 Thompson, 'Khrushchev and Gorbachev as Reformers', p 93.
28 K. Carlyle, 'The Impact of Gorbachev's reforms on the Disintegration of the
Soviet Union (South Africa, 2002) pp. 1-90 (p. 32).
29 Thompson, 'Khrushchev and Gorbachev as Reformers', p 93.
30 R. Grogin. 'Natural Enemies' in The United States and the Soviet Union in the
Cold War, 1917-1991. (New York, 2001) p. 324.
31 Thompson, 'Khrushchev and Gorbachev as Reformers' p. 88.
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policies of acceleration and increasing quantitative indicators of growth at any
price conflicted with the goals of structural change, quality of output and
economic reform."32 Another failure can be seen in connection with Gorbachev's
anti alcohol campaign which added the government budget deficit and increased
production of moonshine instead of its intended effects of increasing labour
productivity of fixed capital. On the whole, the attempted "beginnings of
democratization in a society lacking democratic experience contributed to the
further disorganisation of the Soviet economy and all made for chaos. " 33
Gorbachev may have failed to convert the Soviet Union into the democratic
nation he sought but this should not obscure he courage to attempt to change a
stagnant system for the better of Soviet welfare. He intended to provide a
greater freedom of expression and change the views of citizens towards
government, unfortunately, his inability to meet rising popular expectations in
the economic sphere ultimately lead to the dissolution of Communist Russia in
1991.
In Summary, when addressing how Gorbachev succeeded in radically
transforming the Soviet Union whilst Khrushchev was ousted before he could
achieve long lasting change, it's important to note that there were fundamental
differences between the leaders and their environments. Firstly Gorbachev
intended on deeper structural reform at a time when the need for reform was
shared by many others. However, Khrushchev was not faced with an imminent
catastrophe if drastic action had not immediately been taken. Therefore this
allows Gorbachev to draw upon similar reform efforts of Khrushchev but in a
much more substantial way. Finally, Gorbachev greatly expanded the 'political
nation', thereby expanding his power at the expense of his fellow oligarchs.' By
drawing into the political arena new actors even more radical than himself,
Gorbachev broadened the political spectrum, thereby creating a middle ground
for himself to occupy. While he often satisfied neither right nor left, he
consistently managed to play one against the other, using the threat of a
backlash from the other side to bolster his own position. This was not apparent
under Khrushchev's rule, as he chose to lead from the front, making him subject
to all economic and political reforms which eventually failed. This goes a long
way to explaining his unpopularity amongst other government officials. After
evaluating the intentions and outcomes for Soviet economic reform under
Khrushchev and Gorbachev it has become obvious that these two men had many
similarities in their ideologies based on combating deep seated diseases within
the Soviet system which has changed the economics and politics of Russia
forever.
Bibliography.
Carlyle, K 'The Impact of Gorbachev's reforms on the Disintegration of the Soviet
Union (South Africa, 2002) pp. 1-90
32 Khanin, 'Economic Growth in the 1980's' p.81.
33 Khanin, 'Economic Growth in the 1980's' p.82.
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Goldman I. Marshall, 'Gorbachev and Economic Reform in the Soviet Union' in
Eastern Economic Journal, Vol. 14, No. 4 (1988), pp. 331-335
Grogin, Richard. 'Natural Enemies' in The United States and the Soviet Union in
the Cold War, 1917-1991. (New York, 2001)
Hanson, Philip. "Khrushchev: Hope Rewarded, 1953-1960' in The Rise and Fall of
the Soviet Economy: An Economic History of the USSR from 1945 (Harlow, 2003),
pp.48-69.
Harrison, Mark. 'Coercion, Compliance and the Collapse of the Soviet Command
Economy' in the Economic History Review, Vol. 55 (London, 2002) pp397-433.
Hewett, Ed 'Khrushchev to Brezhnev: Previous efforts at Economic Reform' in
Reforming the Soviet Economy: Equality verses Efficiency (Washington, 1988),
pp211-256.
Khanin, Gregorii. 'Economic Growth in the 1980's' in The Disintegration of the
Soviet Economic System. (London, 1992) pp. 73-85.
Narayanswamy, Ramnath. 'End of Gorbachev Era?' in Economic and Political
Weekly, Vol. 26, No. 31/32 (August, 1991), pp. 1846-1849.
Robbin F. Laird. 'The Gorbachev Challenge' in Proceedings of the Academy of
Political Science, Vol. 36, No. 4, Soviet Foreign Policy(1987), pp. 1-9.
Thompson, William. 'Khrushchev and Gorbachev as Reformers: A Comparison' in
British Journal of Political Science, Vol. 23, No. 1 (Cambridge, 1993), pp. 77-105.
Word Count. 3,154.