CAPITALISM IN RUSSIA.   Term Paper ID:24475 Click to get this paper

Essay Subject: Examines problems & promises of economic reform in transition from communism to free market.... More...

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Paper Abstract: Examines problems & promises of economic reform in transition from communism to free market. Paper Introduction: The recent revolution in the Soviet Union was largely bloodless. Once again, Russian society is being restructured, along with the dissolution of the union of the various Russian republics. The seeds of this new revolution can be found in the society of the Soviet Union over its history, a society that was tightly controlled by a growing and complex bureaucracy which intruded into every facet of life. The new revolution has attacked this bureaucratic structure, showing an awareness that much of the stagnation in soviet society derived from this central core and from the way in which it moved outward to encompass virtually everything in Soviet society. The issue to be faced is what sort of economic and social structure would be best for Russia. Attempts are under way to introduce and solidify democracy and capitalism, but for many in Russia the Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. The federalbudget deficit was over 3 percent of GDP in 1991 and is now down to 3.5percent in 1995, according to the Russian government. [3]"Russia: What's Next." The World & I (September 1996), 22. in addition, some1 , Soviet citizens engaged legally in small-scale crafts and trades.The rest of the Soviet market economy was technically illegal and so hiddenand described as the "underground economy."[6] The transition has built onboth the legal and the illegal market economy. It is notclear how Yeltsin intends to treat these industries, whether he will shieldthem behind protective tariffs or try to stimulate their development withpreferential tax rates and the attraction of external resources.[11] The recent election in Russia points to the fact that most of thevoting population now accepts the idea of reform and supported Yeltsin andreform and rejected any return to a controlled economy such as existed inthe Soviet Union: The result showed that basic principles of private ownership and free economic activity have now been accepted by most of the population. There have beenmore changes since as more respondents accept private ownership.[9] Progress in developing a Western-style market economy in Russia hasbeen uneven. The new revolutionhas attacked this bureaucratic structure, showing an awareness that much ofthe stagnation in soviet society derived from this central core and fromthe way in which it moved outward to encompass virtually everything inSoviet society. This has produced an imbalance in Russia's export structure thatwill one day change, though not in the immediate future. [6]Ibid., 27. The mostimportant reform is the shift from state to private ownership, and this isalso the reform that most went against decades of state indoctrination.The cooperative movement in 1988 and 1989 was the first attempt at legalprivate enterprise in the Soviet Union, and it met with considerableopposition. At the same time, in spite ofthese problems, it would seem that the move to a capitalist economy is notlikely to change unless the masses become even more disenchanted with thesystem than they are now. "Stumbling Between Freedom and Anarchy." The Washington Quarterly (Winter 1997), 41-58.McKay, John P., Bennett D. Boston: Houghton Mifflin, 1996."Russia: What's Next." The World & I (September 1996), 22-23.White, Stephen, Graeme Gill, and Darrell Slider. The beginnings of a market infrastructure are in place. The issueis more complex when specific reforms are examined rather than merely theidea of reform as such. [5]Ibid., 27. A History of World Societies: Volume II. Critics of the transformation of Russia point to a number of currentproblems they attribute to capitalism, such as rampant organized crime,official corruption, inability to pay members of the armed forces, a highunemployment rate, and high prices for certain goods. The size of defense spending has fallen from over 2 percent of GDP in the198 s to around 5 percent today. But, to a great extent, Yeltsin was also elected by Russians who fear disorder, instability, and civil strife.[12]Yeltsin convinced the people that a Communist victory would mean a newrevolution and massive social upheaval, and he also convinced them that ifhe lost, it might mean civil war. The Politics of Transition. [8]Ibid., 3 . [2]Ibid., 1115-1116. The communists tried to appeal to voterdiscontent in the recent election and failed. [4]Jim Leitzel, Russian Economic Reform (New York: Routledge, 1995), 1. Many of theseproblems might have developed in any case. Cambridge: University Press, 1993.----------------------- [1]John P. The questionindicated that market-based pricing was the main element in the transitionto the market. The great human resource in Russia is a highlyeducated and well-trained workforce, with wages a mere fraction of worldlevels. The seeds ofthis new revolution can be found in the society of the Soviet Union overits history, a society that was tightly controlled by a growing and complexbureaucracy which intruded into every facet of life. A survey in June 199 examined the specific issueof market-based pricing, or prices based on supply and demand, which mostpeople correctly interpreted as meaning higher prices. The issue to be faced is what sort of economic and socialstructure would be best for Russia. New political alliances produced new tensionsuntil Russia was declared independent and withdrew from the SovietUnion.[2] Observers note that Russia has been moving toward a market economy,though they wonder if the people will continue on this road. Attempts are under way to introduceand solidify democracy and capitalism, but for many in Russia theuncertainties of a capitalist system are simply too great. The largest number of people in all republics favoredcontinuing the stable, government-set prices for all goods. Considerable progress has been made in the Russian economy since thedissolution of the Soviet Union: "In less than five years, most wholesaleand retail prices have been freed and store shelves are full."[7] Theprivate sector now accounts for more than 6 percent of GDP. in 1996,Monthly inflation was kept below 3 percent. A survey conducted sixmonths later, though, showed that 54 percent were willing to work for aprivate employer while only 27 percent refused to do so. Foreign trade suffered greatlywith the severance of Russia from the other former Soviet republics but haslargely recovered. Still other observers see a need fora transition period with a socialist system to be replaced by a capitalistsystem when the people are more ready to cope with such a change and whenthe economy is strong enough to support it as well. The people may decry aspectsof the new market economy, but they are still dedicated both to reform andto stability. [7]Keith Bush, "A New New Economic Plan?," The World & I (September1996), 3 . The only Russian manufactured goods that can compete on the worldmarket are products of the military-industrial complex and the space andnuclear energy industries. OfficialRussian statistics indicate that there has been a decline in production instate-run industries, but there has also been a rise in private-sectoractivities. Hill, and John Buckler. The crisis facingSoviet society as the union disintegrated came from several sources, butthe economic problems, the growing crime rate, the inter-ethnic violence,and the political struggles all derived from the deep crisis risingquestions about the legitimacy of Soviet political institutions and theidentity of the Soviet people.[1] Gorbachev brought about many changes in Soviet politics and society.In 1989 changes occurred throughout eastern Europe through a series ofpeaceful revolutions. In August1992, respondents were asked if they thought the economic reforms shouldcontinue or be stopped, and 53 percent supported the reforms while only 2 percent wanted them stopped. The output from these private plots provided the legal source for private sales of food on "collective farm" markets in Soviet cities.[5]Prices at these markets were more or less unregulated. New York: Routledge, 1995.Lieven, Anatol. [1 ]Bush, 32. In 1985 he inherited a country with astagnating economy, an ambitious but self-defeating foreign policy, and acorrupt and inept elite short of energy and ideas. Late in 1989, nearly half of all respondents disapproved ofthe new businesses, and only 25 percent approved. [12]Lieven, 46.----------------------- 9 Russia achieved a visible foreigntrade surplus over $2 billion in 1995, and this was partially offset bynet imports of services at something over $8 billion. Continuing down the road to reform is seen as a way ofmaintaining stability, and any change in direction is seen as dangerous.Capitalism in some form is best for the future of Russia, for this is theonly way to cure the ailing economic structure that Communism produced andthat led directly to the disintegration of the former Soviet empire. There has been an increase in the number andfrequency of public opinion surveys in Russia in recent years. In truth, though, the areas most in need of Westerninvestment and technology transfers are the consumer goods and food-processing industries, both of which have been long neglected. Yearly inflation was2,65 percent in 1992 and was reduced to 131 percent by 1995. The economic and social situation when Gorbachev assumed power wasalready in deterioration, and the economy in particular was falling furtherand further behind the West. The changes have been considerable, butthe country has much more to do if it is to become a capitalist economy.[8] Little progress in terms of economic reforms had been accomplished bythe end of the Gorbachev era, and the success or failure of any reformafter that time would be linked to the level of popular support that couldbe garnered for that policy. For the timebeing, most western investment is likely to be channeled into the rawmaterials sector. BibliographyBush, Keith. The world then asked whether the Soviets wouldfollow their satellites. "A New New Economic Plan?" The World & I (September 1996), 3 -37.Leitzel, Jim. Boris Yeltsin in the election in the fall of 1996 promised tohelp disadvantaged members of Russian society, those suffering the mostduring the changeover, but he has yet to follow through on that promise.While the economy has been improving, it has not yet achieved a level thatwould attract foreign investment, which remains relatively low compared tocountries such as China and Hungary. The recent revolution in the Soviet Union was largely bloodless.Once again, Russian society is being restructured, along with thedissolution of the union of the various Russian republics. McKay, Bennett D. Even those respondents unhappy with their ownsituation believed that further reforms would improve matters. The latterwould prefer some form of socialism. [9]Stephen White, Graeme Gill, and Darrell Slider, The Politics ofTransition (Cambridge: University Press, 1993), 188-189. Each of the Western models issufficiently similar, though, that the path taken by the Russian socialistsystem will be clearly in a new direction.[4] Russia has a market economyand has included capitalist-style behavior for as much as 25 percent of alleconomic activity in the pre-reform USSR, some of which was even legal.The legal portion was dominated by collective farm markets: Farmers who worked on the large state and cooperative farms also were permitted small private plots for growing produce and raising a limited amount of livestock. Russia would like togain membership in the World Trade Organization (WTO) and the Organizationfor Economic Cooperation and Development (OECD), but this is likely to takeseveral years.[1 ] Russian exports are dominated by raw materials such as oil, gas,timber, metals, and ores, and this is likely to continue for the mediumterm. The standard of living has improved in Moscow and St.Petersburg for most people, but life has worsened for those who are old andon a pension.[3] Since the time of the failed coup attempt in 1991, the Russianeconomy has been in a transition to a Western-style capitalist country.This only partially identifies the goal, since there are several differenttypes of Western capitalist country. [11]Ibid., 37. Russian Economic Reform. Hill, and John Buckler, A History of WorldSocieties: Volume II (Boston: Houghton Mifflin, 1996), 1112-1113. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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