3-GORBACHEV+Margolis,+Seth

Seth Margolis
 * Heavy Industry & Infrastructure**


 * What was the situation for that group/institution before Gorbachev became Premier?

Before Gorbachev, there had been a history of focusing on the heavy industries and infrastructure of Russia to improve the country overall. This could be seen with Stalin for example, when he held the power. As part of Stalin’s Five Year Plan in 1927, industry was supposed to be made immensely larger. This of course meant workers were focused on the heavy industries instead of the focus of food and agriculture. The Five Year Plans are known to have been catastrophic failures, are cited often as examples surrounding the failures of communism. Before Gorbachev introduced his reforms, the communist party had a tight grip on the decisions and actions that different groups of the economy made, including the heavy industries. With these reforms, Gorbachev allowed these groups to conduct foreign trade to a certain extent on their own, and without the intervention of the communist leadership. The Ministry of Foreign Trade up to this time had a monopoly on almost all trade operations. When it came to infrastructure, Russia was barely hanging out compared to the rest of the world.

“Economically, socially, and politically, the Soviet Union is at odds with itself. While the republics continue to assert their independence, the gross national product of the Soviet Union continues to decline, and the specter of starvation is reflected in charity packages from abroad, even from such countries as India.”


 * How did that group/institution interpret the application of those policies to it?

The USSR was the minority of the world, with many other countries having a market economy and democratic political system of some sort. When Gorbachev introduced his policies in hopes of not being left behind by the rest of the world, hope was high for positive outcomes. There was a split in results for the heavy industries and infrastructure. The infrastructure saw benefit from the perestroika reforms, as for the first time in the history of the USSR foreign countries that were not necessarily communist could invest within the country, bringing along their own means of newer technology and transportation. This led to outside countries fixing the infrastructure in certain ways to their own standards.

The Heavy Industries could not be brought to an international standard as quickly as the USSR wanted however. When people were brought to the cities for the industries and left the farms, there was a need for grain that could not be matched. As the 1980’s progressed, the USSR was buying grain from international trade and selling oil to cover the losses. When oil prices dropped in the late 1980’s, Russia was forced to take loans from Western countries to continue to buy the needed grain. The USSR was then at the mercy of the Western countries and was therefore unable to stop protesting or similar action as it would lead to refusal of money from the western world. After the fall of the USSR, Russian politician Aleksandr Kobblev stated:

“And that is when we began to understand that if we wanted radical reform we would inevitably come up against the resistance of the system. And that is what happened. And from that moment on people began to say that the system is unreformable and the Party is unreformable. Although there did remain some illusions, some hopes, that it could all be done without major conflicts.”


 * How did the Soviet state apply those policies to that group/institution, and what were the effects?

The method the Soviet state used to apply these policies was similar to how the groups received the policies. When the policy was announced in 1985, majority of Soviet politicians had high hopes that the new policy would bring the USSR back to the status of a world power that had once been held. The hope was that by updating different groups of the government like heavy industries, infrastructure, education and so on, the economy would somewhat fix itself Two years later, these hopes were crushed however. “In 1987 the failure of this policy became evident. The country's participation in the world economy was,for the most part, dominated by oil exports, the principal source of hard currency. This situation degenerated as oil prices went down. At the same time, the price of imported grain remained lower than that of domestic grain, leaving no incentive for the rigid agricultural kolkhozy (collective farms) to produce grain.” Yes, there were benefits from the perestroika programs in infrastructure, but they never realized the goals the soviet government hoped they would help achieve.


 * What was the significance of Gorbachev’s reforms as it pertained to that group/institution?

Gorbachev was essentially the last chance for the USSR to adapt to the world around them. It was clear by this point that the communist method that the USSR, and China even, were maintaining was a dead end next to the market economy the western world had. The policy of Perestroika was perhaps too bold to be successful, relying on a huge country to have its people adapt and survive in very little time. China might have suffered the same fate if they had so suddenly followed Perestroika’s policy; for starters, many of the people in the USSR did not even understand how a market economy operated. When the oil prices fell in the late 1980’s, the USSR’s fate was clear. Their largest export was the only thing barely keeping them alive as they were already borrowing money at that point.

“Soviet enterprisers have one thing in common: they do not understand the industrial world—the industrial ocean and the generally accepted rules for navigating it. They do not know the best routes, or the nature and location of reefs and currents. A lot of wrecks are inevitable under such circumstances.Are such crashes of any benefit to the world? Is it possible to avoid them, or to reduce their number? What can be done to minimize the uncertainties of sailing the open seas?”

Bibliography
 * "The Economic Collapse of the Soviet Union." The Economic Collapse of the Soviet Union. San Jose State University, n.d. Web. 03 Mar. 2014.
 * Gooding, John. "Gorbachev and Democracy." JSTOR. N.p., n.d. Web. 03 Mar. 2014.
 * Shama, Avraham. "Member Login." Questia School. N.p., n.d. Web. 02 Mar. 2014.