Economic Disasters of the Twentieth Century

Economic Disasters of the Twentieth Century

Edited by Michael J. Oliver and Derek H. Aldcroft

The First and Second World Wars, the great depression, oil shocks, inflation, financial crises, stock market crashes, the collapse of the Soviet command economy and Third World disasters are discussed in this comprehensive book. The contributors subject these disasters to in-depth assessment, carefully considering their costs and impact on specific countries and regions, as well as assessing them in a global context. The book examines the legacy of economic disasters and asks whether economic disasters are avoidable or whether policymakers can learn from their mistakes.

Chapter 8: The Demise of the Command Economies in the Soviet Union and its Outer Empire

Steven Morewood

Subjects: economics and finance, economic psychology, financial economics and regulation, money and banking


1 Steven Morewood On 25 April 2005 Vladimir Putin, President of Russia, gave the annual address to the Federal Assembly of the Russian Federation, which had emerged from the former Soviet Union: Above all, we should acknowledge that the collapse of the Soviet Union was a major geopolitical disaster of the [twentieth] century. As for the Russian nation, it became a genuine drama. Tens of millions of our co-citizens and compatriots found themselves outside Russian territory. Moreover, the epidemic of disintegration infected Russia itself. Individual savings were depreciated, and old ideals destroyed. Many institutions were disbanded or reformed carelessly. Terrorist interventions and the Khasavyurt capitulation that followed damaged the country’s integrity. Oligarchic groups – possessing absolute control over information channels – served exclusively their own corporate interests. Mass poverty began to be seen as the norm. And all this was happening against the backdrop of a dramatic economic downturn, unstable finances, and the paralysis of the social sphere. Many thought or seemed to think at the time that our young democracy was not a continuation of Russian statehood, but its ultimate collapse, the prolonged agony of the Soviet system. (Putin 2005) Such nostalgia heralded an effort to revive some elements of the Soviet monolith while paying lip service to democracy and capitalism. But there could be no reconstitution of the old system per se, no turning back to the old economic ways, centred on the command economy, which sowed the seeds of the disaster that engulfed the Soviet Union, bringing about...

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