Economic system

How did the Soviet economic system affect consumer goods?

The now-defunct Soviet Union was not a good place for its citizens, who suffered from chronic shortages of consumer goods. The goods available to them were generally inferior to those available in the West.

During its almost seven decades of existence, from 1922 to 1991, the Union of Soviet Socialist Republics was one of the two main communist powers – the other being China – which followed the model of central planning. of its economy, a fundamental principle of communism.

As such, ordinary citizens of the Soviet Union were generally not allowed access to imported consumer goods, especially those made in the United States. Also known as the “Iron Curtain,” the Soviet economic system called for self-sufficiency in everything from bread and clothes to cars and fighter jets.

The Soviet Union failed for several reasons. Political analysts say the Soviet economic system was inferior to the free market economy embraced by the United States and most of the West.

Input-output analysis developed by Nobel Prize-winning economist Wassily Leiontief views the economy as a network of interconnected industries; the output of one industry is used as input by another.

Centralized planning, however, left little room for quick adjustments in the event of errors of judgment or external factors beyond the state’s control. When one industry failed, other industries followed suit.

In the mid-1980s, the Soviet Union controlled 98% of retail. Private businesses were taboo. Only small family farms in rural areas remained in private hands.

Meanwhile, the countries surrounding the Soviet Union in the years following World War II had become economic powerhouses producing consumer goods that greatly improved the quality of life for citizens who could afford them. With German cars, French perfumes, Italian wines and British-made appliances, Western Europeans lived the good life compared to their Soviet counterparts, who had grown accustomed to long queues every time that the supply chain from farm to market was disrupted.

Worse still, consumers in the Soviet Union had developed a taste for foreign products, such as American-made Levi jeans, although similar Soviet-made garments were available at lower prices. It didn’t matter that the jeans were smuggled in and sold for excruciating prices. Soviet consumers had just enough exposure to the outside world to familiarize themselves with what was available and to demand better quality goods than the Soviet economic system could provide.

Throughout its history, the Soviet Union tried to instill in its people the message that consumerism was an evil that belonged only to the decadent West. Soviet consumers believed otherwise, which is why they hailed perestroika and the collapse of the USSR.