Russia

The Economy under Brezhnev

Despite Khrushchev's tinkering with economic planning, the economic system remained dependent on central plans drawn up with no reference to market mechanisms. Reformers, of whom the economist Yevsey Liberman was most noteworthy, advocated greater freedom for individual enterprises from outside controls and sought to turn the enterprises' economic objectives toward making a profit. Prime Minister Kosygin championed Liberman's proposals and succeeded in incorporating them into a general economic reform program approved in September 1965. This reform included scrapping Khrushchev's regional economic councils in favor of resurrecting the central industrial ministries of the Stalin era. Opposition from party conservatives and cautious managers, however, soon stalled the Liberman reforms, forcing the state to abandon them.

After Kosygin's short-lived attempt to revamp the economic system, planners reverted to drafting comprehensive centralized plans of the type first developed under Stalin. In industry, plans stressed the heavy and defense-related branches, slighting the light consumer-goods branches (see The Postwar Growth Period, ch. 6). As a developed industrial country, the Soviet Union by the 1970s found it increasingly difficult to maintain the high rates of growth in the industrial sector that it had enjoyed in earlier years. Increasingly large investment and labor inputs were required for growth, but these inputs were becoming more difficult to obtain. Although the goals of the five-year plans of the 1970s had been scaled down from previous plans, the targets remained largely unmet. The industrial shortfalls were felt most sharply in the sphere of consumer goods, where the public steadily demanded improved quality and increased quantity. Agricultural development continued to lag in the Brezhnev years. Despite steadily higher investments in agriculture, growth under Brezhnev fell below that attained under Khrushchev. Droughts occurring intermittently throughout the 1970s forced the Soviet Union to import large quantities of grain from Western countries, including the United States. In the countryside, Brezhnev continued the trend toward converting collective farms into state farms and raised the incomes of all farmworkers. Despite the wage increases, peasants still devoted much time and effort to their private plots, which provided the Soviet Union with a disproportionate share of its agricultural goods (see Agriculture, ch. 6).

The standard of living in the Soviet Union presented a problem to the Brezhnev leadership after the growth of the late 1960s stalled at a level well below that of most Western industrial (and some East European) countries. Although certain appliances and other goods became more accessible during the 1960s and 1970s, improvements in housing and food supply were slight. Shortages of consumer goods encouraged pilferage of government property and the growth of the black market. Vodka, however, remained readily available, and alcoholism was an important factor in both the declining life expectancy and the rising infant mortality rate that the Soviet Union experienced in the later Brezhnev years (see Health Conditions, ch. 5).