Discussion Questions
Perestroika and Collapse of the USSR
1. Analyze the events and significance of Gorbachev’s perestroika.
a. What kind of problems in the Soviet system did this policy intend to correct?
b. How significant were the changes that resulted?
2. "Gorbachev intended perestroika as a set of policies to remedy serious deficiencies in the Soviet
system. In one of history's greatest paradoxes, however, it was the remedies themselves which proved
fatal, resulting in the system's collapse." Discuss.
3. If you were the Soviet leader in 1980s and your goal was to improve the existing regime, what policies
or reforms would you recommend? Explain why.
4. How did economic growth evolve in the USSR in comparison to the USA? Give the general picture
without necessarily citing exact figures.
5. Economists often speak of an “extensive growth trap”.
a. What is the difference between intensive and extensive growth?
b. What type of growth that characterized the Soviet planned period?
c. What would you expect to find in an economy that is stuck in such a trap?
6. When researchers of the transition process mention “legacies of the Soviet economic model” in Eastern
Europe and the former Soviet Union, what do they most likely mean?
a.
List the most important legacies of the Soviet economic model
b. Choose a specific legacy and explain how it impacts on the transition process.
7. Soviet economic performance was impressive in a world historical context. Discuss.
8. Based on "The Costs of the Soviet Empire" article online. What costs did the author mention and how
significant were those costs?
9. Based on "Exchange Rates, 1953" article online. List the main facts you have learned from this article.
10. What are the main features of a command economy?
11. Did socialism eliminate inequality in earning and opportunities? Explain.
12.
What role did oil prices play in bringing down the Soviet economy?
13.
What role did the war in Afghanistan play in bringing down the Soviet economy?
14.
List major political and economic events which lead to the collapse of the Communist economies of
the Soviet Union and Eastern Europe.
15.
Soviet Union fell apart in 1991, the official birth year of the internet. Coincidence or not? Comment on
the possible link between the advent of the new information technologies and the demise of
communism.
16.
“In the beginning of the 20th century the majority of the Russian population supported the communist
regime because the regime promised them so much needed income security. By the 1980s, the cost of
income security started to outweigh its benefits. As a result communism was no longer necessary.”
Respond. Clarify the “costs and benefits” of the regime.
17. The Soviet experience teaches us to accept the principle that private firms operating in free markets are
the most effective and efficient way of organizing production, and that state intervention in markets are
not only undesirable but most of the time harmful. Argue.
18.
What advantages does the system of central planning have over a free market economy?
19.
Many of the advantages of central planning can be matched within a market system by the “right”
government intervention into the free market activity. Give an example how this is possible.
20. Mises and Hayek concluded that the economic growth in the administratively planned economy would
be insufficient to improve well-being and sustain the system over time. According to Oscar Lange’s
Trial and Error model, state-run economy could at least be as efficient as a free market economy.
a. What are the inherent weaknesses of the administrative command economy according to Mises
and Hayek?
b. How could socialist regime achieve high levels of efficiency according to Lange?
c. Why do you think Lange’s model failed to materialize in the ex-communist countries?
d. Several modern economists have pointed out that the danger of command regimes is outside
economic theory. What types of undesirable non-economic consequences are associated with
command economies?
21. The collapse of the Soviet Union in the late 1980s has settled once and for all the question of whether a
socialist economy is possible by proving socialist economic theory to be wrong. Argue.
22. Respond to the statement "Europe has both private property, and social equality. Therefore, capitalism
can be reformed and it is not necessary to adopt a socialist state to achieve a better society."