Why The Soviet Economy Failed: Consequences of Dictatorship and Dogma

The disintegration of the Soviet Union stemmed largely from the long decline of its economy. This decline undermined the role of the Communist party, which had been the central force in the country’s political and economic structures. The legitimacy of the party derived from its promise of social progress. But the command economy that Stalin had built in the name of the party stymied the very progress, the very “forces of production” that were to be promoted. How did this come about?

The decline of the Soviet economy cannot be reliably documented; statistical data are in dispute. Until recently, the official statistics indicated falling rates of economic growth rather than actual contraction. Industrial production was reported to have risen at an average annual rate of 8.5 percent during the five-year plan of 1966-70, but to have receded to 3.7 percent a year for 1981-85. The rates for agricultural output and labor productivity show similar trends for the two decades that ended in 1985.

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