1979 Soviet economic reform
Encyclopedia
The 1979 Soviet economic reform, or "Improving planning and reinforcing the effects of the economic mechanism on raising the effectiveness in production and improving the quality of work", was an economic reform initiated by Alexei Kosygin, the Chairman
of the Council of Ministers. During Leonid Brezhnev
's rule of the Union of Soviet Socialist Republics
(USSR) the Soviet economy began to stagnate; this period is referred to by historians as the Era of Stagnation. Even after several reform attempts by Kosygin and his protëgës, the economic situation in the country continued to deteriorate. In contrast to his earlier reform initiative, the 1965 economic reform
, this reform tried unsuccessfully to centralise the economy by enhancing the powers of the ministries
.
The reform was never actually fully realised. When Kosygin died in 1980, the reform was practically abandoned. Nikolai Tikhonov
said at the 26th Congress that his government would implement the reform during the Eleventh Five-Year Plan
(1981–1985). This never happened, and even Brezhnev complained that implementation of the reform had been slow. This unfinished reform is seen by some as the last major pre-perestroika
reform initiative put forward by the Soviet government.
(CC) and the Council of Ministers. The reform tried to reaffirm and separate the economic functions of the state and the ministries. To accomplish this, several procedures were established to ensure that each ministry would contribute to the state budget. All ministries were given a fixed budget even if the ministry did not fulfill the five-year plan. The reform supported giving enterprises more autonomy from the central government and extending the rights of the ministries by giving them new principles. The reform tried to improve labor productivity by introducing new production indicators via the State Standards Committee, and tried to solve some of the USSR's economic problems by reducing the effects of sectorial barriers set up by the ministries. The reform succeeded in giving more power to the regional authorities and the Soviet Republics; this development was consolidated by a Central Committee decree in 1981.
The 1965 reform
tried, with little success, to improve the quality of goods produced. In the 1979 reform Kosygin tried to displace gross output
from "its commanding place" in the planned economy
, and new regulations for rare and high-quality goods were created. Capital investment was seen as a very serious problem by the Soviet authorities by 1979, with General Secretary
Leonid Brezhnev
and Premier Kosygin claiming that only an increase in labor productivity could help develop the economy of the more technologically-advanced Soviet Republics such as the Estonian Soviet Socialist Republic
(ESSR). When Kosygin died in 1980, the reform was practically abandoned by his successor, Nikolai Tikhonov
. Brezhnev told the 26th Congress that the implementation of the reform had been very slow. Tikhonov, during his speech to the 26th Congress, told the delegates that parts of the reform would be implemented during the Eleventh Five-Year Plan
(1981–1985).
Premier of the Soviet Union
The office of Premier of the Soviet Union was synonymous with head of government of the Union of Soviet Socialist Republics . Twelve individuals have been premier...
of the Council of Ministers. During Leonid Brezhnev
Leonid Brezhnev
Leonid Ilyich Brezhnev – 10 November 1982) was the General Secretary of the Central Committee of the Communist Party of the Soviet Union , presiding over the country from 1964 until his death in 1982. His eighteen-year term as General Secretary was second only to that of Joseph Stalin in...
's rule of the Union of Soviet Socialist Republics
Soviet Union
The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....
(USSR) the Soviet economy began to stagnate; this period is referred to by historians as the Era of Stagnation. Even after several reform attempts by Kosygin and his protëgës, the economic situation in the country continued to deteriorate. In contrast to his earlier reform initiative, the 1965 economic reform
1965 Soviet economic reform
The 1965 Soviet economic reform, widely referred to simply as the Kosygin reform or Liberman reform, was a reform of economic management and planning, carried out between 1965 and 1971...
, this reform tried unsuccessfully to centralise the economy by enhancing the powers of the ministries
Ministries of the Soviet Union
-Ministries:- Other agencies under the Cabinet of Ministers :-See also:* Council of People's Commissars, head of government from 1917-1946* Council of Ministers, head of government from 1946-1991* Cabinet of Ministers, head of government in 1991...
.
The reform was never actually fully realised. When Kosygin died in 1980, the reform was practically abandoned. Nikolai Tikhonov
Nikolai Tikhonov
Nikolai Aleksandrovich Tikhonov was a Soviet Russian-Ukrainian statesman during the Cold War. He served as Chairman of the Council of Ministers from 1980 to 1985, and as a First Deputy Chairman of the Council of Ministers, literally First Vice Premier, from 1976 to 1980...
said at the 26th Congress that his government would implement the reform during the Eleventh Five-Year Plan
Eleventh Five-Year Plan (Soviet Union)
The Eleventh Five-Year Plan, or the 11th Five-Year Plan, of the Union of Soviet Socialist Republics was a set of goals designed to strengthen the country's economy between 1981 and 1985...
(1981–1985). This never happened, and even Brezhnev complained that implementation of the reform had been slow. This unfinished reform is seen by some as the last major pre-perestroika
Perestroika
Perestroika was a political movement within the Communist Party of the Soviet Union during 1980s, widely associated with the Soviet leader Mikhail Gorbachev...
reform initiative put forward by the Soviet government.
Intentions
The reform was initiated, and created, by Premier Alexei Kosygin in a joint decision with the Central CommitteeCentral Committee of the Communist Party of the Soviet Union
The Central Committee of the Communist Party of the Soviet Union , abbreviated in Russian as ЦК, "Tse-ka", earlier was also called as the Central Committee of the All-Union Communist Party ...
(CC) and the Council of Ministers. The reform tried to reaffirm and separate the economic functions of the state and the ministries. To accomplish this, several procedures were established to ensure that each ministry would contribute to the state budget. All ministries were given a fixed budget even if the ministry did not fulfill the five-year plan. The reform supported giving enterprises more autonomy from the central government and extending the rights of the ministries by giving them new principles. The reform tried to improve labor productivity by introducing new production indicators via the State Standards Committee, and tried to solve some of the USSR's economic problems by reducing the effects of sectorial barriers set up by the ministries. The reform succeeded in giving more power to the regional authorities and the Soviet Republics; this development was consolidated by a Central Committee decree in 1981.
Implementation
The 1979 reform was an attempt to reform the existing economic system without any radical changes. The economic system was centralised even more than previously. The effectiveness of the planned economy was improved in some sectors, but not enough to save the stagnation economy of the USSR. One of the major goals of the reform was to improve the distribution of resources and investment, which had long been neglected because of "sectorialism" and "regionalism". Another priority was the elimination of the influence "regionalism" had on the five-year plan.The 1965 reform
1965 Soviet economic reform
The 1965 Soviet economic reform, widely referred to simply as the Kosygin reform or Liberman reform, was a reform of economic management and planning, carried out between 1965 and 1971...
tried, with little success, to improve the quality of goods produced. In the 1979 reform Kosygin tried to displace gross output
Gross Output
Gross output is an economic concept used in national accounts such as the United Nations System of National Accounts and the US National Income and Product Accounts...
from "its commanding place" in the planned economy
Planned economy
A planned economy is an economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a government agency...
, and new regulations for rare and high-quality goods were created. Capital investment was seen as a very serious problem by the Soviet authorities by 1979, with General Secretary
General Secretary of the Communist Party of the Soviet Union
General Secretary of the Central Committee of the Communist Party of the Soviet Union was the title given to the leader of the Communist Party of the Soviet Union. With some exceptions, the office was synonymous with leader of the Soviet Union...
Leonid Brezhnev
Leonid Brezhnev
Leonid Ilyich Brezhnev – 10 November 1982) was the General Secretary of the Central Committee of the Communist Party of the Soviet Union , presiding over the country from 1964 until his death in 1982. His eighteen-year term as General Secretary was second only to that of Joseph Stalin in...
and Premier Kosygin claiming that only an increase in labor productivity could help develop the economy of the more technologically-advanced Soviet Republics such as the Estonian Soviet Socialist Republic
Estonian Soviet Socialist Republic
The Estonian Soviet Socialist Republic , often abbreviated as Estonian SSR or ESSR, was a republic of the Soviet Union, administered by and subordinated to the Government of the Soviet Union...
(ESSR). When Kosygin died in 1980, the reform was practically abandoned by his successor, Nikolai Tikhonov
Nikolai Tikhonov
Nikolai Aleksandrovich Tikhonov was a Soviet Russian-Ukrainian statesman during the Cold War. He served as Chairman of the Council of Ministers from 1980 to 1985, and as a First Deputy Chairman of the Council of Ministers, literally First Vice Premier, from 1976 to 1980...
. Brezhnev told the 26th Congress that the implementation of the reform had been very slow. Tikhonov, during his speech to the 26th Congress, told the delegates that parts of the reform would be implemented during the Eleventh Five-Year Plan
Eleventh Five-Year Plan (Soviet Union)
The Eleventh Five-Year Plan, or the 11th Five-Year Plan, of the Union of Soviet Socialist Republics was a set of goals designed to strengthen the country's economy between 1981 and 1985...
(1981–1985).
See also
- 1965–71 reform1965 Soviet economic reformThe 1965 Soviet economic reform, widely referred to simply as the Kosygin reform or Liberman reform, was a reform of economic management and planning, carried out between 1965 and 1971...
- 1973–74 reform1973 Soviet economic reformThe 1973 Soviet economic reform was an economic reform initiated by Alexei Kosygin, the Chairman of the Council of Ministers. During Leonid Brezhnev's rule of the Union of Soviet Socialist Republics the Soviet economy began to stagnate; this period is referred to by historians as the Era of...
- 1984 reform