On taking office in 1985 Mikhail Gorbachev inherited a Soviet economy with a sagging rate of industrial and agricultural output which was in desperate need of reform. Gorbachev chose to adjust the old system with a period of perestroika. Perestoika translated literally means restructuring and was the term attached to the attempts (1985-91) by the Prime Minister to transform the stagnant, inefficient command economy of the Soviet Union into a decentralized market-oriented economy. However, it was this program of economic, political, and social restructuring that became the unintended catalyst for dismantling what had taken nearly three-quarters of a century to erect: ...view middle of the document...
This led to the introduction of Glasnost meaning openness, his philosophy being that political change must be the precursor to economic change - the economic crises and subsequent events of 1989 - 1992 were to prove him wrong. The idea of Glasnost was to give the people a voice to criticise the conservative nature of the hierarchy and to bring about reform by this means. Gorbachev was a brilliant short-term planner and tactician and this often allowed him to out maneuver his opponents. However, his long-term strategy was often lacking. Gorbachev refused to address the real issues of how economic reform was to come about and was extremely successful in instigating political reform without suggesting an economic course. He was content to watch as the Russian economy sailed peacefully towards the iceberg. Had action been taken at this point, perhaps the Soviet Union may have been saved.The final stages of the perestroika can be described as 'too little too late'. Gorbachev at this stage was a desperate man attempting to cling to power. He had now realised that the economic problems must be addressed and commissioned a report by two economists, Yavlinsky and Shatalin. Perhaps if Gorbachev had acted upon this report and introduced it immediately then there may have been a chance of success. However, he dithered for months between the report, known as the 500 day plan, intended to introduce a market economy, a state managed economy, and the 'third way' a slow introduction of a market economy. Ultimately, Gorbachev took too long to make up his mind and paid the price. He refused to introduce the 500-day plan as it meant voluntarily relinquishing his power. Under a state run economy, he maintained control, but under a market economy, all control was lost. By this time the Russian economy was in serious trouble with shortages of even the most basic items like bread. Industrial and agricultural output declined during 1990-91 leading to a drastic fall in gross national product and national income. GNP in 1991 as a percentage of 1989 was over 20% less as was national income. By 1991 the Soviet economy had stopped declining and gone into complete collapse.Reactions to the reforms and new policies in Russia were mixed. Reform policies rocked the foundation of entrenched traditional power bases in the party, economy, and society but did not replace them entirely. Newfound freedoms of assembly, speech, and religion, the right to strike, and multi candidate elections undermined not only the Soviet Union's authoritarian structures, but also the sense of 'order and predictability'.There were several reasons why the perestroika failed. First of all Gorbachev never planned to remake the Soviet system he merely wanted to modernise it. Minor adjustments he implemented were his attempts to discipline the work force w...
