23 Mar 2015
The second half of the 1980s was marked as the fundamental change in the Soviet era. The era of reconstruction, "Perestroika" had gone into history, with the main purpose of introducing the new Soviet Union, which was the creation of the legal social state and democratisation of a new country. It is considered "the most dramatic event in political economy to happen since the Great Depression of the 1930s" 
The research question: "To what extent could the political and socio-economic consequences of Gorbachev's reforms be considered a failure?" adopts a critical and evaluative approach of the Soviet reforms such as, perestroika, new political thinking and glasnost, during the mid 1980s, assessing negative as well as positive consequences of the reform. This investigation explores the question of whether the socio-economic and political changes caused by Gorbachev's reforms can be either justified as a complete failure, contributing to decline in socio-economic development and political factors, or on the other side viewed as a successful policy, that brought freedom to East Europe. For answering the question it is essential to examine the political and socio-economic conditions and address the necessity of such changes that was caused by a profound crisis in the of the Soviet-Union pre-Gorbachev era prevailing in late 1970s.
Regardless of the conclusion, this topic will remain under controversy causing different judgments among the historians, as an Emeritus Professor of politics at Oxford University said: "The extent to which he [Gorbachev] is regarded a success or a failure will long remain a matter of controversy. There seems no doubt, though, that both in Russia and outside he will be regarded as a figure of decisive importance, regardless of whether his activities are viewed positively or highly negatively." 
During the investigation a wide range of sources was used, representing polar opposite perspectives of the West and the East, from both the time of Perestroika and in hindsight. The sources used can be separated into three groups. The first group were those who believed that the initiative and perseverance of Mikhail Gorbachev's reforms made the first step to ensure the transformation of the country to a civilised state of the Western world. The second group- evaluates Gorbachev's reforms more negatively, believing that his imperialistic policy has led to serious irreversible consequences of the country. Finally, the third group includes political scientists and economists like Marshall I. Goldman and who combine their studies in both approaches, considering both positive and negative aspects of Perestroika. Therefore, the essay will be divided into Political and Socio-Economic reforms of Perestroika during 1985 and 1991 according to these identified groups.
2. Conditions in the Soviet Union prior to Perestroika
The necessity of Perestroika and such radical changes were caused by the profound crisis of the Soviet system that were formed in the late 70s including the fall of Soviet authority in the eyes of public opinion in the Soviet Russian and in the Eastern Europe, a so-called "socialist camp", where new democratic ideas were forming and demanding more human and political rights, as well as a rejection of the totalitarian regime.
Therefore, for Mikhail Gorbachev, his reforms were seen as the best solution to the urgent political and socio-economic problems, which were aimed to strengthen and develop the Soviet Union. Furthermore, he was not anticipating that Perestroika would lead to a complete collapse of the system and USSR.
Between 1980 and 1984, the changes in leadership have had a great impact on destabilising the government. Moreover, USA - USSR relations were getting worse every day. After the Yalta Conference and Churchill's "Iron Curtain" speech "all contributed to the growing fear of the Soviet Union"  and the beginning of the Cold War. The rivalry of two sides, has increased the military budget of the country, while not helping its economy. Additionally, in the mid 1980s, the Soviet Union was demonstrating its military might in the Afghan war that has also turned against it. 
Prior to perestroika, the Soviet economy was marked by the extensive economic growth in the late 1960s that began to pull to the economical development backwards. In the consequent 20 years USSR has experienced a rapid decline in growth of industry from 8.5% to 3.5%. There was also a problematic situation in consumers' market which was also linked to the drop of oil prices. According to the economists, the prices of raw materials were comparatively cheap to other products, which caused inefficient and wasteful usage of these raw materials.  Between 1970 and 1980 USSR has earned 170 billion US dollars from the petroleum export. However, again, this money was invested into the military expansion and purchase of new machinery which was inefficiently used and did not enrich the country in the long run. 
The agricultural situation in the Soviet Union was also rather complex. The money earned from petroleum exports was used for food imports, instead of introducing new efficient agricultural reforms substituting the old collective system. The economic problems reflected on production in both agrarian and industrial sectors of the country. The harvest fell from 237 million tons from 1978 to 158 million tons in 1981, depicting a very radical change. Similarly, the production of steel fell from 151 million in the 1978 to 147 million in 1982, which is particularly surprising as it always has been constant apart from the World War II period. 
The economic and political constraints in the country such as economic stagnation and corruption, contributed to the rapid decline in the social sphere. Budget's proportion that went to people was not simply enough. This has lead to various social problems such as low standards of living, health care and high levels of alcoholism. These three main factors have affected the ideological and moral values of the people in the country causing demoralisation of the society. That also affected the quality and efficiency of work, such as poor working habits and incentives.
As a result, in the early 80s the income per capita has decreased three fold compared to mid 60s. Additionally, there were issues with income distribution, resulting in high inequality between the lower and higher classes. This, of course, all went against the communist ideology. People were deprived of the civil rights and as a result various dissident movements broke in USSR and Eastern Europe.
3. Analysis of Political Reforms
Glasnost was the main political reform introduced in 1986 by Gorbachev. After 50 years of silence and fear the society was finally allowed to speak and express its opinions.
With the policy of Glasnost, which Gorbachev has referred to as the other side of the Perestroika's coin, the system became less strict in many aspects of the society. This has included media, reduction in censorship and freedom of speech, opening up USSR to the rest of the world. Only in the year 1986 more than 14 million new newspapers were printed. After Olympic boycotts, the 1986 Goodwill games were seen live from both sides of the "Iron Curtain". In the period of two years Gorbachev has made the fear disappear, bringing pop-culture to the USSR, creating a new breed of young people. 
The policy of glasnost was responsible for drastically changing the spiritual life for people. The government ceased prosecution of many key figures that were exiled under Stalin's rule, like Andrei Sakharov, who was inÂ internal exile for seven years.  Gorbachev said that they need "glasnost in order to ensure fulfillment of tasks of the Party Congress"  or in other words Perestroika was used as the base for his reforms. Primarily it was aimed to criticise and expose the corrupt leadership and was an instrument to improve political activity. In his speech to the January 1987 CC Plenum, Gorbachev has said: "there canÂ be no person beyond criticism or people with no right to criticise." 
Natan Edelman, a well-known historian, wrote in 1989: "that the intellectuals' support for PerestroikaÂ is virtually unanimous."  All the great minds that were deprived during the Soviet Regime, has benefited from Gorbachev's reforms. "Gorbachev's reforms have assured intellectuals of the right to free speech, unprecedented artistic freedom, wide access to the mass media, and a chance to be elected to the Soviet legislature and to serve in government."  These were the kind of thinkers who were essential for country's future growth.
With the reform of Perestroika a general democratisation of life began in the country. Gorbachev publicly stated that "Democratisation will not weaken our society but on the contrary, it will strengthen it."  Even though many were against the political reforms, the supreme Council has adopted two new laws changing and altering the Constitution of the USSR, and introducing voting system for people's deputies. The final stage of the political reform which was the "Congress of public Deputies of the USSR", has elected Gorbachev as the president of the USSR. Despite the numerous mistakes in the reforms, this was still a significant step towards liberation from the previous one-party system.
The slogan of "the new political thinking", was a big change for the USSR and the world. The main idea of the concept was that any military conflict, is wrong. During the 1987 Washington Summit meeting between leaders of the USSR Mikhail Gorbachev and the U.S. President Ronald Reagan, a disarmament treaty was finally agreed and signed.  Gorbachev's "new thinking" and non-aggressive policy improved the US-Soviet relations as well as the international situation in general. Weapons of mass destruction were reduced by 2000 warheads. USSR has refused to further confront the West and wished for an end of the "Cold War", for which Gorbachev received a Nobel Prize. This breakthrough has not only brought relief to the American-Soviet tensions, but has also allowed Gorbachev to cut the military budget that was essential to reduce the inflationary pressure and improve the living standards. 
During 27th Party Congress in February/March 1986 after confirming the Brezhnev Doctrine,  the failed operation in maintaining Afghanistan gave Gorbachev no other choice in than to abandon the Doctrine and follow the policy of Perestroika. By 1989 Gorbachev withdrew almost all combat personnel from Afghanistan. 
After the free elections in Poland which were marked by Communist Party's defeat by Solidarity in 1989, Gorbachev has renounced the Brezhnev Doctrine.  His speech at the UN on Dec. 7, 1989 represents the abandonment of communism from the Eastern Europe.
"In the next two years, theirÂ numerical strength will be reduced by 500,000 persons, and the volumeÂ of conventional arms will also be cut considerably. [Ã¢â‚¬Â¦]. By agreement with our allies in theÂ Warsaw Pact, we have made the decision to withdraw six tank divisionsÂ from the GDR, Czechoslovakia, and Hungary, and to disband them by 1991." 
The results of Perestroika in terms of foreign policy and political freedom cannot be considered a failure. Due to the policy of glasnost, the media and formation of independent press could now criticise anyone they wanted. People were finally free to speak. Perestroika was a big step towards liberalism with multyparty system and elections. 
Now, almost 20 years after Perestroika, Gorbachev himself, who has lost the political power to Yeltsin after Perestroika, does not regret his actions and marks the results of his reforms as success . Gorbachev claims: "it was such a success as it launched the democratic process in the Soviet Union. After the break-up ofÂ USSR, Russia today is continuing to develop - the market economy as well as pluralism in several domains such as politics, ideologies, religion, etcÃ¢â‚¬Â¦" 
Collapse of the Soviet totalitarian empire and the formation of the 15 new states, some of which later became the members of NATO and a part of new Europe; destruction of the socialist camp and the Warsaw Pact with democratic changes in the political system can all be seen as examples of positive sides of Gorbachev's reform. It also had a further positive effect on economic reforms, that in the long-run has resulted in growth in Eastern Europe and Russia. Moreover, according to Gorbachev, another positive side was that they have "managed to avoid a real bloodbath"  in achieving these changes.
On contrary, the radical changes were not welcomed by most of the older generation Soviet party members. They believed that the "perfect" Soviet regime has started to lose its totalitarian control and its isolationist character. For example, the control over media that resulted in a weaker censorship, has then opened many negative aspects of USSR that has been previously presented to be "flawless". Gen. Valentin Varennikov, Chief of Soviet Ground Forces has stated that the social and military situation of the country was becoming worse  and Nina Anderyeva, a historian, saw the younger generation's negative attitude towards the Soviet past as a moral degradation and a negative result of Glasnost.  The society has started to hear the problems in the Soviet Union such as poor living conditions, alcoholism etc.
The nationalistic feeling and the strive to independence from the East European countries has increased. Many ethical problems which were previously sealed, have now opened into various riots, demanding for greater independence and stabilisation of the economy.
4. Analysis of Socio-economic Reforms
The crisis in the economic development was a significant reason for the Soviet leadership in changing the structure of the economy. In July 1987, theÂ Supreme SovietÂ has passed the Law on State Enterprise. It was seen as the key in "conversion to a market economy"  . The core of reform included the abandonment of the old planned economy and transition of the decision-making from state to private businesses. This has resulted in abolition of the Ministry of Foreign Trade and the GKES, which were involved in foreign economic operations before. 
However, the initial process of privatisation was much slower than planned. A small number of vendors was the main reason for high prices on the market, and the prices of goods in cooperatives were always higher than the prices in state stores. By 1989, only after one year of Perestroika's inception there were 133,000 private ownerships. However, in comparison to China's ten million private enterprises in 1980,  it is only demonstrating the Soviet delay in the privatisation. Due to mistakes in reforms and social elements in the system, the transformation of the Soviet "planned" system into a free market economy has failed.
The third economic change, was the Venture Law, that went into effect in June 1987 after Gorbachev and his leadership have decided to open the doors of the Soviet market to foreign firms. This was completely against the Marxist ideology and was viewed as an economic and political espionage by the Soviet party members, fearing that the capitalists would gain control over the Soviet market, exploiting their workers as well as stealing their ideas.  However, it was more the Soviet government and the newly bred mafia that took advantage of this, rather than the foreign companies which instead have brought advances to the Russian market.
A similar situation was in the agrarian sector. In May 1, 1987 Gorbachev has authorised the establishment of individual farming and has introduced decollectivisation. However, again, this process was very slow. By 1990 there were only 20Â 000 private farms in the Soviet Union, from that only 240 were registered in Russia and only 4 in Ukraine!  Many who did set up the private farms were subject to attacks and were classified as "kulaks". In contrast, to compare with contemporary dynamics, the Chinese process of decollectivisation went at a much faster pace. By 1980 in China all farms were decollectivised. 
Perestroika has also introduced socio-economic reforms to tackle serious problems like alcoholism that also affected the economical growth. Gorbachev's anti-alcohol campaign was aimed to decrease the consumption of alcohol, improve health and increase the efficiency of the work force and production. However, the anti-alcohol campaign had a rather negative impact on the Soviet economy. As this was a great hit for the state monopolies, including the disappearance of vineyards in Georgia and other republics. It has decreased the tax income by 13% and was said to cost the Soviet Union 200 billion Rubles. It did not stop people from drinking, instead the policy encouraged black markets and increased the production of moonshine,  that were usually low-quality and harmful for health. Additionally, it had a side effect on the consumption of sugar as home-made vodka required large quantities of sugar for production. The increase in consumption was 10 kilograms per capita in only 5 years, effecting the market and the prices. Both sugar shortage and the reduction in imports of consumer goods combined with inflation caused a "buyers panic."  Moreover, the situation got worse as not only sugar disappeared from the markets but normal goods from sugar to furniture. As a result consumer behavior was to buy as many goods as possible to avoid future shortages, spending hours in queues for nearly everything.  .
During the years of Perestroika nothing significant was actually done to reform the economic methods. There were many laws adopted that allowed small businesses and private corporations, however, none had any fundamental effect on the principles of the Soviet economy. The political reforms have lead to governments losing of control over the national economy that they had planned out for many years. Gorbachev's indecisiveness in his reforms might explain the fact that he did not know what he was doing.
A rapid decline in production has resulted in 20% decline in national income. The consumption of new machinery and lower tax revenues contributed to a rapid increase of the budget deficit. Table 1 shows the estimate budget deficit of the country between 1978 and 1990. CIA states that in 10 years the deficit had increased from 16 billion rubles to 68 billion rubles and later on increased even further reaching three digit values. Although different sources have different values and estimations, it is a fact that the situation catastrophically affected the people. As a result, to decrease the deficit more money was printed which has additionally increased the inflation. As Gorbachev has stated in his speech in the 1990 "We have lost control over the financial situation in the country". By late 1990 the inflationary prices of goods were increasing at a 20% rate per annum and few years later this value has increased to 70%.  There were shortages of various consumer goods and a rationing system was introduced. This resulted in a drop of living standards, the Soviet Union fell to 82nd place in the world in terms of living standards. Another problem that has elevated during the economical crisis, was a serious debt as the expenditures were 20-30 % higher than the income (GDP)  . The debt of the Soviet Union was estimated to be about 60 billion dollars. The Soviet Union had to sell its gold reserves to purchase the foreign currency. This is a very bright illustration that Perestroika has not only failed to improve the old system, instead it disturbed the old system and further deteriorated the situation.
According to the existing evidence, it is clear that "Perestroika has suffered a defeat in the form it was originally conceived"  from a socio-economic side and failed in achieving its main aims in improving the economic situation, instead had rather negative results and consequences. Gorbachev's reconstruction has weakend the social and economic conditions in the country. A further phrase by Aleksandr Zaychenko further proves this statement: "Russians today [in 1989] eat worse than did Russians in 1913 under the Czars." 
Even though elimination of the state monopoly in foreign trade was a positive sign in transformation to the market economy, as foreign corporations were able to show the Soviet system new and more advanced ways of doing business. This was a sign that "He [Gorbachev] knew where he wanted to end up, with a more productive, consumer-oriented economy, but he did not know how to get there."  Between 1985 and 1991, ten new economic reforms have been introduced, and "not a single one was ever implemented"  no one went down that road before. As a result this half-measure in the economy has lead to an economic crisis. After the reconstruction of the old approaches to the economy there were no new methods that would replace the old ways, the Soviet economy was stuck in the middle between the "planned" and "private" economies, which are considered as an economic failure. As stated by Marshall I. Goldman, an expert on the Soviet economy, his book Went Wrong with Perestroika, clearly shows the fundamental problems in socio-economic sphere that were formed as result of Gorbachev's indecisive maneuvers and highlights their contribution to result in a total failure and the collapse of the whole system.
On equilibrium, however, political factors seem to be more successful. Reforms like: Glasnost and New Political Thinking, played a crucial role in improving the U.S.-Soviet relations breaking the tensions and diminishing the possibility of a military conflict between the two military blocks, NATO and the Warsaw Pact, as well as finally opening the iron curtain and breaking the Berlin wall. Additionally, Mikhail Gorbachev's "new thinking"during Perestroika was the key in ending the Cold War. After 5 decades of hostilities, "In the last few years, throughout the worldÂ people were able to heave a sigh of relief, thanks to the changes forÂ the better in the substance and atmosphere of the relations betweenÂ Moscow and Washington."  Additionally, after three decades of confrontation USSR became friends with China. This all was doubtlessly one of Gorbachev's successful achievements of his reforms.
People take Gorbachev as a "hero, others accuse him of causing a disaster"  . Similarly Perestroika is considered as a failure because it has given way to the totalitarian control of the country and, on the other side, can be considered a success for giving freedom to people. "People's conclusions are linked to their understanding of things."  These understandings will change with time and therefore change their whole idea towards the event.
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1985: Anti- Alcohol Campaign http://www.soviethistory.org/index.php?page=subject&SubjectID=1985drylaw&Year=1985&navi=byYear
1987 | Nuclear Disarmament http://www.austria1989.org/index.php?option=com_content&view=article&id=66&Itemid=96
1988 | Gorbachev Ends the Cold War http://www.austria1989.org/index.php?option=com_content&view=article&id=67&Itemid=97
Gorbachev, Glasnost, Perestroika, Arms Agreement , http://www.youtube.com/watch?v=595W4JJHa2U
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