Trajectories of Economic Transformations. Lessons from 2004 for 2024 and Beyond. Valery Kushlin

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      This was facilitated by the high scale and rate of capital investment in the national economy and a significant and stable increase in the production apparatus over a long period of time. The growth rate of production in industry was higher than the average in the national economy. Although the productivity of social labor increased continuously, economic growth was extensive rather than intensive. The growth of the well-being of the country’s population clearly lagged behind the rate of economic growth.

      Symptoms and Causes of Economic Stagnation

      Since the 1970s, there has been a clear downward trend in the growth rate of such indicators as real per capita incomes and retail turnover of state and cooperative trade. During the Twelfth Five-Year Plan (1986—1990), for the first time in many years, the country faced a decline not only in the rate but also in the level of well-being of the people. This was so shocking that in 1986—1990 the government, glossing over this fact, removed the indicator of “real incomes of the population” from official statistics. It was replaced by the indicator of “cash incomes of the population”, which looked more decent due to the invisible presence of incipient inflation in it.

      The deterioration of the overall economic dynamics affected the weakening of the country’s position in foreign trade. The average annual growth rate of foreign trade turnover fell from 8.3% in 1966—1970 to 0.7% in 1986—1990.

      The dynamics of economic parameters in the USSR in 1985—1990 is indicative (Table 3.3).

      From a comparison of the data for 1985, it is not difficult to conclude that it was a clear reflection of economic stagnation. This underscored the urgent need for major changes in the economy and society. The figures for 1986 and partly for 1987 testify to attempts to implement these changes proclaimed by perestroika and Gorbachev’s policy of “accelerating” socio-economic development. The growth rate of capital investment sharply increased (to 8.4% in 1986).

      The growth rate of industry increased slightly, mainly due to investments in mechanical engineering. But then these intentions to accelerate economic development fizzled out. The year 1990 ended with an absolute decline in GNP, industrial and agricultural production, social labor productivity, and foreign trade turnover. In 1988—1990, as if in opposition to this, retail trade turnover and cash incomes of the population began to grow rapidly, which embodied the growing inflationary trends and, at the same time, the exhaustion of the ideas of “perestroika” and “acceleration”, which were replaced by new slogans of the “social orientation” of the economy.

      Fundamental Flaws in the Soviet Economic System

      It can be argued that the fundamental flaw of the economic system that existed for a long time in the country was its inability to overcome the extensive framework of economic development and to include the factors of economic intensification caused by the radical shifts in world science, technology, and management after the 1950s.

      The sphere of science and engineering in the country, especially after the end of the Second World War, was among the most privileged areas of activity. As can be seen from Table 3.4, the growth rates of investments in science were quite high.

      In terms of the level of knowledge intensity of the economy, the USSR quickly reached indicators commensurate with the most developed countries of the world. Even on the eve of the collapse of the USSR in 1990, expenditures on science from the state budget and other sources amounted to 5% of the country’s national income.

      The total expenditures on science from the state budget and other sources for the period 1986—1990 in the USSR amounted to 153.3 billion rubles, i.e., their growth compared to the previous five-year period (1981—1985) amounted to 116.9%.

      It is impossible not to admit that the initial period of the reversal in the world of the scientific and technological revolution was also full of events in our country that inspired great faith in its capabilities. In the USSR, there was a rapid increase in investment in the field of science. If in 1950 expenditures on science in our country amounted to 1 billion rubles, or less than 1.4% of the national income, then in 1960 it was 3.9 billion rubles (2.7%), in 1970 it was 11.7 billion rubles (4.0%). In the 1970s, the USSR was on par with the United States in terms of the relative value of spending on science to national income. Over the past 20 years (from 1950 to 1970), the number of scientific workers in the Soviet Union has increased by 5.7 times, and their share in the total number of workers and employees in the national economy has increased from 0.4% to more than 1%.

      The significant absolute and relative increase in resource investment in science, especially in the 1960s, did not, however, lead to an adequate increase in its contribution to the national economy. The transformation of the productive forces based on scientific discoveries and inventions and the proclaimed task of “combining the achievements of scientific and technological development with the advantages of the socialist economic system” proved to be a much more complicated matter in practice than it was seen in theoretical reflections on the future of scientific and technological revolution. There was a lack of perseverance and dedication to ensure the effective materialization of R&D achievements at the level of state programs, and due attention was not paid to the reorientation of investment policy to the process of accelerating scientific and technological progress. Although during each five-year plan the fixed assets in the СКАЧАТЬ