Economic Reforms After 1964 (Edexcel A Level History): Revision Note

Summary

• This note will examine the economic reforms after Khrushchev but before Gorbachev

• After Khrushchev’s removal, new leaders attempted reforms to deal with slow growth and inefficiency in the Soviet economy

• The most ambitious were the Kosygin reforms (1965), but these were quickly abandoned

• Brezhnev prioritised stability over radical change, introducing limited reforms in both industry and agriculture

• Andropov made some attempts at economic improvement, but his short leadership meant reforms had little impact

The 'Kosygin reforms', 1965

• Introduced by Alexei Kosygin, the new Soviet Premier

• Aimed to improve efficiency by shifting the focus from quantity of production to profitability and quality

Key reforms under Kosygin

• The state cut investment to the most inefficient collective farms

  • The savings made were put into light industry

• Managers were given more power to set targets

• Wages were linked to output

• Bonuses rewarded efficiency

Impact of the 'Kosygin reforms'

• The reforms were abandoned within by August 1968 because:

  • Party officials resisted losing control

  • The focus on profit seemed too much like capitalism

  • The Prague Spring of 1968 made similar reforms to Kosgyin

    • The subsequent invasion made Soviet leaders wary of reforms that seemed to weaken central planning

Brezhnev's economic reforms

Military spending

• Brezhnev massively increased military spending

  • This was driven by Cold War competition with the USA, especially over nuclear weapons

• By 1970, military spending accounted for 13% of Soviet GDP

  • The USSR 'kept up' in the arms race

  • However, this limited investment in consumer goods and agriculture

'Developed socialism'

• Brezhnev introduced the concept of 'developed socialism'

  • This argued that the USSR had already achieved a stable socialist society

  • Its priorities included:

    • Job security

    • Low food prices through importing grain from the West

• 'Developed socialism' contrasted with Khrushchev’s goal of reaching full communism by 1980

  • Economically, this encouraged a conservative approach, with leaders avoiding risk or reform

The 'second economy'

• A widespread black market, known as the 'second economy', developed during Brezhnev’s rule

  • It involved:

    • Trading scarce goods

    • Providing private services

    • The illegal production of goods outside of state control

• Without the widespread use of terror, the government could not eliminate the black market

  • Brezhnev tolerated the second economy because it helped ordinary citizens access goods that the command economy failed to provide

  • However, this also meant corruption grew

Brezhnev's agricultural reforms

• Brezhnev continued investment in collective farms

  • By the late 1970s, agriculture received over 25% of Soviet investment

• There were some improvements in production, but inefficiency remained:

  • Many crops rotted before reaching consumers due to poor storage and transport

  • Private plots continued to produce a large share of food despite taking up only a small proportion of land

• By the early 1980s, the USSR was importing huge amounts of grain from the USA and Canada

Andropov's economic reforms

• Andropov became General Secretary in 1982 after Brezhnev’s death

• Unlike Brezhnev, Andropov admitted the economic problems in the USSR

  • However, he prioritised labour discipline and efficiency over structural reform

Anti-corruption campaign

• Andropov launched a major anti-corruption drive to tackle widespread abuses in the Soviet economy

• He targeted senior officials accused of using their positions for personal gain

  • One high-profile case was the prosecution of Nikolai Shchelokov, Minister of Internal Affairs, for corruption and abuse of office

• The campaign aimed to show the public that the government was serious about removing inefficiency

Anti-alcohol campaign

• Andropov attempted to reduce the widespread problem of alcohol abuse

  • The issue hurt productivity and discipline in the workplace

• Restrictions were placed on sales, with shorter shop hours for alcohol

• There were stricter punishments for drinking at work

• However, alcohol was so ingrained in Soviet social life that these measures had limited impact

  • Many turned to illegal home-brewing

    • This vodka was sometimes known as 'Andropovka'

Operation Trawl

• Introduced campaigns to reduce absenteeism and alcohol abuse in the workplace

• Increased monitoring of workers by the KGB

  • They punished those who skipped shifts or underperformed

• However, Andropov was in poor health and died in 1984, so reforms had little long-term impact