Khrushchev's economic policy

Question 1

what were the problems with the stalinist economic system?

Answer 1

-ministers in moscow set different industrial targets for each enterprise and were out of touch
-not enough administrators as they had been purged
-enterprises didn’t want to increase production or innovate because it would mean that their targets the next year would be higher
-output targets were assessed by weight so lighter industries were neglected
-resources weren’t being efficiently used which meant an increasing amount of capital was needed to maintain growth

Question 2

describe the 6th 5YP:

Answer 2

-1956
-targets were too optimistic
-therefore the plan was abandoned in 1958

Question 3

what steps did Khrushchev take towards decentralisation?

Answer 3

-60 moscow ministries were abolished
-USSR divided into 105 economic regions each with its own sovnarkhoz (economic council)

Question 4

describe industrial change under 1959 7YP:

Answer 4

-state committees and a supreme economic council were set up to supervise the plan - clear that moscow still had a degree of central control
-clear emphasis on improving living standards e.g. promised a 40hr week and 40% pay rise by 1965
-slogan = ‘catch up and overtake the USA but 1970
-slight shift in priorities from heavy industry to modern light industry e.g. expansion of chemicals industry (like fertilisers) housing factories for new flats
-increased production of consumer goods
-exploited natural resources more
-built power stations
-expansion of railways, air transport, and comms and technology
-focus on space race - sputnik first artificial satellite 1957, 1961 Gagarin first man in space

Question 5

successes of industrial change:

Answer 5

-statistically Khrushchev appeared very successful with huge increases to heavy industry and huge growth in consumer goods/light industry
-improvement to living standards

Question 6

failures of industrial change:

Answer 6

-heavy spending on armaments and the space race distorted the economy
-didn’t come close to rivaling USA’s economy
-from 1958 industrial growth began to slow down especially in consumer industries which only had a 2% growth in 1964
-state supported industries did considerably better than non-state supported ones
-decentralisation measures actually added another layer of bureaucracy and his system was abandoned in 1965
-leadership in space race was only a result of high risk taking - instunmentation and navigation were inferior to that of the USA