Economy - Brezhnev

• Reform discredited after Khrushchev's rejection from the party
• Brezhnev and the leaders after even abandoned the word 'reform'

Restoring the Economy

• Khrushchev's fall led to a rejection and undoing of his reforms
• - The party was reunited
• - Seven year plans were abandoned and in 1966 went back to five year plans

Aims

• Brezhnev content to just mind the system that Stalin had created
• Although like Brezhnev he hoped to produce more consumer goods
• Brezhnev was less ambitious in the quantity and quality of the consumer goods he expected

The 'Kosygin reforms'

What was it?

• Kosygin advocated reforms that were designed to cut investment in the most inefficient collective farms and divert it to light industry
• Also he proposed giving power over production to factory managers and judging success by profit not product levels
• Designed to make factories produce goods that consumers want

What happened?

• Introduced January 1968
• Similar reforms had been attempted in Czechoslovakia and was part of a series of reforms that lead to a rebellion against the Soviet Union
• This discredited Kosygin's programme
• Halted in August
• Authority back to central planners

Military investment

• Brezhnev increased military investment - 11% of GDP in 1964 to 13% in 1970
• Aim was to become equal with the US in terms of nuclear fire power
• Wanted to do this so that the Soviet Union wouldn't have to back down again (as had happened in Berlin Crisis of 1961 and Cuban missile of 1962)
• Success - nuclear parity was achieved by 1970
• However... Achieving and maintaining it was expensive and led to growing economic problems

'Developed Socialism'

• Brezhnev didn't follow through Khrushchev's commitment to reaching communism by 1980
• With the slow economic growth in the 1960 and 70s and increased military spending meant there was no way the Soviet Union could be turned into a land of plenty
• Instead Brezhnev argued that the Soviet Union should focus on improving living standards
• Meant abandoning reaching communism by 1980 and replacing it with 'developed socialism' - an economy with job security and low prices
• Low prices were achieved by importing large amounts of grain from the west rather than expanding the Virgin Land Scheme

Second Economy

• Brezhnev accepted the Black Market (or second economy) as a necessary evil
• Rather than trying to stop it let it continue because it made consumer goods and food more widely available and therefor helped his goal of improving living standards