What do you think?
Rate this book
New Cold War History
The Struggle to Save the Soviet Economy: Mikhail Gorbachev and the Collapse of the USSR
For half a century the Soviet economy was inefficient but stable. In the late 1980s, to the surprise of nearly everyone, it suddenly collapsed. Why did this happen? And what role did Soviet leader Mikhail Gorbachev's economic reforms play in the country's dissolution? In this groundbreaking study, Chris Miller shows that Gorbachev and his allies tried to learn from the great success story of transitions from socialism to capitalism, Deng Xiaoping's China. Why, then, were efforts to revitalize Soviet socialism so much less successful than in China?
Making use of never-before-studied documents from the Soviet politburo and other archives, Miller argues that the difference between the Soviet Union and China--and the ultimate cause of the Soviet collapse--was not economics but politics. The Soviet government was divided by bitter conflict, and Gorbachev, the ostensible Soviet autocrat, was unable to outmaneuver the interest groups that were threatened by his economic reforms. Miller's analysis settles long-standing debates about the politics and economics of perestroika, transforming our understanding of the causes of the Soviet Union's rapid demise.
Making use of never-before-studied documents from the Soviet politburo and other archives, Miller argues that the difference between the Soviet Union and China--and the ultimate cause of the Soviet collapse--was not economics but politics. The Soviet government was divided by bitter conflict, and Gorbachev, the ostensible Soviet autocrat, was unable to outmaneuver the interest groups that were threatened by his economic reforms. Miller's analysis settles long-standing debates about the politics and economics of perestroika, transforming our understanding of the causes of the Soviet Union's rapid demise.
264 pages, Paperback
First published December 2, 2016
55 people are currently reading
1055 people want to read
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 22 of 22 reviews
February 4, 2017
Few people today wonder why the Soviet Union's economy collapsed in the 1980s. The answer seems simple: communism didn't work. But of course, the issue isn't as simple as all that. After all, the Soviet economy had sputtered along for over 60 years with little sign of disintegration, only stagnation. And the final collapse came only after Mikhail Gorbachev instituted "perestroika" and began the sort of market-based reforms that Western economists had been advocating for generations. So why did these reforms not create the sort of boom that China saw in the same decade?
The answer, Chris Miller shows in this new book, was government deficits to support special interest groups and the inflation used to fund those deficits. The main difference between China and the Soviet Union, was that the USSR at the opening of perestroika hosted a number of powerful industrial groups that had much to lose in any reform. While the Cultural Revolution had ruined all aspects of the Chinese economy and society, the Soviet economy from the Brezhnev era still hosted a massive military-industrial complex (it possibly ate up over 20% of the national economy, and ran a number of its own consumer goods factories), generous agricultural subsidies for collective farm managers (up to another 5% of GDP), and cozy jobs for top "enterprise" managers in heavy industries. In order to push perestroika, Gorbachev had to buy off these interest groups with government money. In his "acceleration" program, he increased investment enterprise spending by a third; he increased prices the state paid for farm products; he even increased military spending. Gorbachev wanted none of this, as detailed transcripts from the Politburo show, but he had to give this up to get even minor reforms. His Law on Individual Labor Activity in 1986, which decriminalized work outside the state, only allowed for families working together. His Law on State Enterprises in 1987 was so watered down in practice that the central Gosplan and ministries still controlled most production. His 1988 efforts to create a "special economic zone" around Vladivostok in the East led to just a handful of regulated joint-ventures where foreigners could take small portion of Soviet companies. In exchange for these meager reforms, the budget deficit went from almost nothing to 10% of GDP in just four years. Since Gorbachev also didn't have the power to push taxes, he allowed inflation to soar at double digits. In a country with controlled prices, this led to empty shelves and economic chaos. In the end, Gorbachev made a bad deal. He shoveled money at already favored sectors and then caused economic misery in order to get just a few measly reforms. I finally see why most Russians today do not admire him.
Miller's book can be a little wordy at times, and he spends too much energy trying to show that the most of the ideas behind perestroika came from China (Gorbachev and his allies Georgy Arbatov, Oleg Bogomolov, and Tatiana Zaslavskaya were also looking at reforms in Hungary and Yugoslavia and Japan, as well as at earlier experiments in the Soviet Union, like the "autonomous link" system on farms), but this is a book that's needed to be written. Miller provides the best explanation I've seen of the economic collapse of one of the most powerful countries of the 20th century.
The answer, Chris Miller shows in this new book, was government deficits to support special interest groups and the inflation used to fund those deficits. The main difference between China and the Soviet Union, was that the USSR at the opening of perestroika hosted a number of powerful industrial groups that had much to lose in any reform. While the Cultural Revolution had ruined all aspects of the Chinese economy and society, the Soviet economy from the Brezhnev era still hosted a massive military-industrial complex (it possibly ate up over 20% of the national economy, and ran a number of its own consumer goods factories), generous agricultural subsidies for collective farm managers (up to another 5% of GDP), and cozy jobs for top "enterprise" managers in heavy industries. In order to push perestroika, Gorbachev had to buy off these interest groups with government money. In his "acceleration" program, he increased investment enterprise spending by a third; he increased prices the state paid for farm products; he even increased military spending. Gorbachev wanted none of this, as detailed transcripts from the Politburo show, but he had to give this up to get even minor reforms. His Law on Individual Labor Activity in 1986, which decriminalized work outside the state, only allowed for families working together. His Law on State Enterprises in 1987 was so watered down in practice that the central Gosplan and ministries still controlled most production. His 1988 efforts to create a "special economic zone" around Vladivostok in the East led to just a handful of regulated joint-ventures where foreigners could take small portion of Soviet companies. In exchange for these meager reforms, the budget deficit went from almost nothing to 10% of GDP in just four years. Since Gorbachev also didn't have the power to push taxes, he allowed inflation to soar at double digits. In a country with controlled prices, this led to empty shelves and economic chaos. In the end, Gorbachev made a bad deal. He shoveled money at already favored sectors and then caused economic misery in order to get just a few measly reforms. I finally see why most Russians today do not admire him.
Miller's book can be a little wordy at times, and he spends too much energy trying to show that the most of the ideas behind perestroika came from China (Gorbachev and his allies Georgy Arbatov, Oleg Bogomolov, and Tatiana Zaslavskaya were also looking at reforms in Hungary and Yugoslavia and Japan, as well as at earlier experiments in the Soviet Union, like the "autonomous link" system on farms), but this is a book that's needed to be written. Miller provides the best explanation I've seen of the economic collapse of one of the most powerful countries of the 20th century.
July 31, 2021
The Struggle to Save the Soviet Economy is in three parts - it covers Gorbachev's reforms; resistance to them from domestic elites, and how Soviet political figures and analysts viewed the reforms of Deng Xiaoping in China, which occurred at the same time.
Chapter 1 discusses the views of the Soviet elite on what would be broadly defined as "socialist economies". There was much to worry about. Economic growth had been stagnant since the 1960s, and there were concerns that the Soviets were continuing to lag further behind. Eastern Europe was permitted some limited experimentation with market mechanisms - this had the mixed result of a higher standard of living than the Soviet Union itself, but also suffered from anemic growth and then prolonged contractions. There is also an extensive discussion on Soviet views of not only the Western economies, but Gorbachev's own interest in China and Japan in particular.
Chapter 2 then segues into Soviet views on China. From academic publications, Miller finds that the Soviet elites had accurate intelligence on what was going on - and while elites and Gorbachev himself read reports on China, Miller also finds some evidence that the average Soviet citizen had some idea of what China was doing, and that had become a topic of interest.
Chapter 3 is the crux of the book. Gorbachev had an interest in economic reforms, but he was stymied by interest groups and local bosses throughout multiple stages of reform. That is, the defense industry, agriculture, and energy. Given the structure of the Soviet economy, these might accurately be termed monopolies, and they had a vast network of suppliers and consumers that relied upon them, and political cadres that would fight for their interests. The Soviet term for these industrial sectors, now ironic given how they frustrated reforms, is a 'complex'.
The last half of the book discusses Gorbachev's attempts to take on the complexes as part of a set of economic reforms, and all of these results - setting up local enterprises, special economic zones, and agricultural reform - were anemic at best.
Chapter 7 discusses the USSR's last economic crisis and eventual collapse. Oil prices fell, and as Gorbachev refused to compromise on living standards - providing subsides for basic consumer goods - the budget spiraled out of control. A global fall in oil prices affected oil producers generally, but the Soviet Union resorted to extreme levels of borrowing, and then when financial markets balked, printing money. As prices were still set by state planners, but still a kind of price inflation made itself felt, and shortages worsened.
The argument was that Gorbachev did not follow Deng because he could not - whereas China was more uniformly poor and its interest groups weaker following the chaos of the tumult of the Cultural Revolution, Gorbachev could not suppress the complexes nor could he buy them out. If reforms had begun earlier, they could have been more successful - but one wonders if the problems of a country are so entrenched that reform was not possible.
Chapter 1 discusses the views of the Soviet elite on what would be broadly defined as "socialist economies". There was much to worry about. Economic growth had been stagnant since the 1960s, and there were concerns that the Soviets were continuing to lag further behind. Eastern Europe was permitted some limited experimentation with market mechanisms - this had the mixed result of a higher standard of living than the Soviet Union itself, but also suffered from anemic growth and then prolonged contractions. There is also an extensive discussion on Soviet views of not only the Western economies, but Gorbachev's own interest in China and Japan in particular.
Chapter 2 then segues into Soviet views on China. From academic publications, Miller finds that the Soviet elites had accurate intelligence on what was going on - and while elites and Gorbachev himself read reports on China, Miller also finds some evidence that the average Soviet citizen had some idea of what China was doing, and that had become a topic of interest.
Chapter 3 is the crux of the book. Gorbachev had an interest in economic reforms, but he was stymied by interest groups and local bosses throughout multiple stages of reform. That is, the defense industry, agriculture, and energy. Given the structure of the Soviet economy, these might accurately be termed monopolies, and they had a vast network of suppliers and consumers that relied upon them, and political cadres that would fight for their interests. The Soviet term for these industrial sectors, now ironic given how they frustrated reforms, is a 'complex'.
The last half of the book discusses Gorbachev's attempts to take on the complexes as part of a set of economic reforms, and all of these results - setting up local enterprises, special economic zones, and agricultural reform - were anemic at best.
Chapter 7 discusses the USSR's last economic crisis and eventual collapse. Oil prices fell, and as Gorbachev refused to compromise on living standards - providing subsides for basic consumer goods - the budget spiraled out of control. A global fall in oil prices affected oil producers generally, but the Soviet Union resorted to extreme levels of borrowing, and then when financial markets balked, printing money. As prices were still set by state planners, but still a kind of price inflation made itself felt, and shortages worsened.
The argument was that Gorbachev did not follow Deng because he could not - whereas China was more uniformly poor and its interest groups weaker following the chaos of the tumult of the Cultural Revolution, Gorbachev could not suppress the complexes nor could he buy them out. If reforms had begun earlier, they could have been more successful - but one wonders if the problems of a country are so entrenched that reform was not possible.
April 5, 2019
Communism is a stillborn ideology whose demise lies in its unviable economics. The missing link between individual interest and economic performance inevitably undermines and destabilizes the system over time. The reformist intelligentsia and party cadres had to face that cruel reality both in China and the Soviet Union during the late 70s, early 80s. The author investigates the intriguing dilemma of why China could make a very successful transition to capitalism while the Soviet Union failed miserably.
China, reeling from the disastrous Great Leap Forward and the brutal Cultural Revolution, could start to tinker with new ideas after Mao's death in 1976. Once liberated from Mao's dogmatic rule the Chinese reformists led by Deng Xiaoping could concentrate power and oust their orthodox political opponents. That required not only a great deal of delicate politicking but also constant pretense. In fact, it’s terribly difficult to transform a communist country into a capitalist economy if you have to constantly demonstrate the continuation of Maoist principles and deny the return to repugnant capitalism. Deng Xiaoping managed to pull off that trick though. He could pacify hard-liner Maoists and, in parallel, nudge the public opinion towards the cautious consensus that there’s is nothing wrong with private ownership or wealth differentials as long as everyone is getting better off. China seem to have introduced the right economic liberalization measures at the right time to stimulate its nascent economy. The reforms started within agriculture which was in a complete disarray with farmers on the brink of starvation. To increase productivity the Chinese leadership allowed private entrepreneurship in agriculture, then in services and pretty much all walks of life. To soothe foreign investors, not a bit hesitant to put their money into a country under communist rule, the Chinese government set up special economic zones with tolerant and secure investment laws as well as competitive tax rates. Thanks to increased agricultural productivity an abundant rural workforce could start to migrate from villages to cities to offer cheap labor to booming industries. All these steps were inconceivable formerly but nicely fell into place one by one in China.
The Soviet Union followed suit a few years later when Brezhnev died, in 1982, leaving a morbidly deformed and stagnating Soviet economy to his successors. The Soviets embarked on the reformist path a bit later than China but, at least, they had the opportunity to closely observe and study the Chinese trends. Soviet publicists, scholars, economists and reformist politicians were remarkably attentive to and well-informed about the economic benefits China could reap from its recent reforms. Explaining the rationale for promoting private entrepreneurship, performance-based remuneration or foreign investments demanded serious mental gymnastics from the Soviet leadership too. To deflect ideological assaults Gorbachev creatively used whatever he could, referencing Lenin’s short-lived New Economic Policies during the 1920s, the more liberal economic systems prevailing in some Eastern European satellites states like Hungary or Poland, or the pro-market reforms by Kosygin during the mid-1960s. Gorbachev and his aides were less successful in tackling the inherent resistance of Soviet bureaucracy and interest groups though. Reform initiatives were postponed, diluted or silently obstructed by complacent ministry apparatchiks, managers of state farms and companies, traditionalists within the Communist Party.
Miller argues that the political-economic establishment in the Soviet Union was less conducive to reforms than in China. Military, industry and agriculture interest groups percolated and controlled the Politburo, the Communist Party and all levels of Soviet administration. Soviet generals, collective farm managers and industry bosses had no interest in supporting reforms and exposing themselves to demanding market requirements. They refused to relent on their demands for generous state subsidies which crippled the Soviet Union’s budget. Gorbachev could not overcome or outwit the troika of agriculture, industry and military interest groups whose vast power and political clout were cemented during the decades of the Brezhnev era. In China, a comparably powerful agricultural lobby was nonexistent and industries played a less significant role with limited political influence. Unlike Gorbachev, Deng Xiaoping faced no threat from military and security services and was able to significantly slash military spending. Although the reforms Gorbachev pursued were in essence the same as in China, the rigidity of regressive economic interests prevented their successful implementation in the case of the Soviet Union.
China, reeling from the disastrous Great Leap Forward and the brutal Cultural Revolution, could start to tinker with new ideas after Mao's death in 1976. Once liberated from Mao's dogmatic rule the Chinese reformists led by Deng Xiaoping could concentrate power and oust their orthodox political opponents. That required not only a great deal of delicate politicking but also constant pretense. In fact, it’s terribly difficult to transform a communist country into a capitalist economy if you have to constantly demonstrate the continuation of Maoist principles and deny the return to repugnant capitalism. Deng Xiaoping managed to pull off that trick though. He could pacify hard-liner Maoists and, in parallel, nudge the public opinion towards the cautious consensus that there’s is nothing wrong with private ownership or wealth differentials as long as everyone is getting better off. China seem to have introduced the right economic liberalization measures at the right time to stimulate its nascent economy. The reforms started within agriculture which was in a complete disarray with farmers on the brink of starvation. To increase productivity the Chinese leadership allowed private entrepreneurship in agriculture, then in services and pretty much all walks of life. To soothe foreign investors, not a bit hesitant to put their money into a country under communist rule, the Chinese government set up special economic zones with tolerant and secure investment laws as well as competitive tax rates. Thanks to increased agricultural productivity an abundant rural workforce could start to migrate from villages to cities to offer cheap labor to booming industries. All these steps were inconceivable formerly but nicely fell into place one by one in China.
The Soviet Union followed suit a few years later when Brezhnev died, in 1982, leaving a morbidly deformed and stagnating Soviet economy to his successors. The Soviets embarked on the reformist path a bit later than China but, at least, they had the opportunity to closely observe and study the Chinese trends. Soviet publicists, scholars, economists and reformist politicians were remarkably attentive to and well-informed about the economic benefits China could reap from its recent reforms. Explaining the rationale for promoting private entrepreneurship, performance-based remuneration or foreign investments demanded serious mental gymnastics from the Soviet leadership too. To deflect ideological assaults Gorbachev creatively used whatever he could, referencing Lenin’s short-lived New Economic Policies during the 1920s, the more liberal economic systems prevailing in some Eastern European satellites states like Hungary or Poland, or the pro-market reforms by Kosygin during the mid-1960s. Gorbachev and his aides were less successful in tackling the inherent resistance of Soviet bureaucracy and interest groups though. Reform initiatives were postponed, diluted or silently obstructed by complacent ministry apparatchiks, managers of state farms and companies, traditionalists within the Communist Party.
Miller argues that the political-economic establishment in the Soviet Union was less conducive to reforms than in China. Military, industry and agriculture interest groups percolated and controlled the Politburo, the Communist Party and all levels of Soviet administration. Soviet generals, collective farm managers and industry bosses had no interest in supporting reforms and exposing themselves to demanding market requirements. They refused to relent on their demands for generous state subsidies which crippled the Soviet Union’s budget. Gorbachev could not overcome or outwit the troika of agriculture, industry and military interest groups whose vast power and political clout were cemented during the decades of the Brezhnev era. In China, a comparably powerful agricultural lobby was nonexistent and industries played a less significant role with limited political influence. Unlike Gorbachev, Deng Xiaoping faced no threat from military and security services and was able to significantly slash military spending. Although the reforms Gorbachev pursued were in essence the same as in China, the rigidity of regressive economic interests prevented their successful implementation in the case of the Soviet Union.
January 24, 2018
Miller begins with the premise that most people think the USSR screwed up. It's not completely clear what it should have done, but what it did do was certainly the wrong choice: maybe Glasnost was a mistake, maybe capitalism was imposed too quickly, maybe they should have adopted China's reforms, etc.
Miller argues all of these views miss the point. The Soviet Union's collapse was brought about by a boring old budget crisis. Mounting inefficiencies in the Soviet Economy led to yawning budget deficit, and it's political system was incapable of making the tough choices needed to resolve it. To achieve the political support he believed necessary to implement reforms to make the economy more efficient, Gorbachev greatly expanded funding for key interest groups even as revenues shrank. As the government lost control of the economy - spiraling inflation and shortages - the economy went into full collapse. Firms stopped working, or hid their profits from the government. Regional governments didn't turn over tax revenues. Eventually the government had no choice but to slash spending across the board, shocking the economy with harsh austerity, and freeing prices. The rampant inflation revealed Soviets far poorer than they had believed, saddled with an inefficient economy that had been maintaining living standards (poorly) on borrowing. The debt itself turned out to be too much, and the country later defaulted.
Why didn't the Soviets seek to emulate China's reforms, which delivered growth, stability, and kept the party in power? Miller's book is primarily about how they tried precisely to do this! He draws on newly released archival material to demonstrate the extent to which the USSR studied China and used it in internal debates. But the power of the interest groups was such that reforms were delayed or watered down. Gorbachev gambled that they would nonetheless increase efficiency by enough to balance the budget. The reforms did start to pay off in the subsequent decade, but not in time to prevent the budget crisis (itself exacerbated by the need to buy support for these policies from powerful interest groups).
The book is a great short primer on what happened to Russia in the 1980s-1990s. It was a good complement to Svetlana Alexievich's portrait of the human cost of economic collapse (Secondhand Times: The Last of the Soviets).
Note: I'm an economist and found Miller compelling. But I'm not a Russia expert, and it's possible there are other factors Miller neglects without me realizing it.
Miller argues all of these views miss the point. The Soviet Union's collapse was brought about by a boring old budget crisis. Mounting inefficiencies in the Soviet Economy led to yawning budget deficit, and it's political system was incapable of making the tough choices needed to resolve it. To achieve the political support he believed necessary to implement reforms to make the economy more efficient, Gorbachev greatly expanded funding for key interest groups even as revenues shrank. As the government lost control of the economy - spiraling inflation and shortages - the economy went into full collapse. Firms stopped working, or hid their profits from the government. Regional governments didn't turn over tax revenues. Eventually the government had no choice but to slash spending across the board, shocking the economy with harsh austerity, and freeing prices. The rampant inflation revealed Soviets far poorer than they had believed, saddled with an inefficient economy that had been maintaining living standards (poorly) on borrowing. The debt itself turned out to be too much, and the country later defaulted.
Why didn't the Soviets seek to emulate China's reforms, which delivered growth, stability, and kept the party in power? Miller's book is primarily about how they tried precisely to do this! He draws on newly released archival material to demonstrate the extent to which the USSR studied China and used it in internal debates. But the power of the interest groups was such that reforms were delayed or watered down. Gorbachev gambled that they would nonetheless increase efficiency by enough to balance the budget. The reforms did start to pay off in the subsequent decade, but not in time to prevent the budget crisis (itself exacerbated by the need to buy support for these policies from powerful interest groups).
The book is a great short primer on what happened to Russia in the 1980s-1990s. It was a good complement to Svetlana Alexievich's portrait of the human cost of economic collapse (Secondhand Times: The Last of the Soviets).
Note: I'm an economist and found Miller compelling. But I'm not a Russia expert, and it's possible there are other factors Miller neglects without me realizing it.
November 11, 2019
I have long been hazy on the reasons for the collapse of the USSR. Chris Miller provides a detailed explanation of the circumstances with many lessons for today's authoritarian regimes, and perhaps also the United States. Why did the Soviet Union collapse 1992, rather than during the mass starvation of 1933, or the death of Stalin in 1953? Why was China's CPC so much more successful in passing perestroika-like reforms?
In Miller's telling, far from being a unified dictatorship, the Soviet Union under Gorbachev became mired in political gridlock, ultimately unable to solve a budget crisis. Gorbachev's anti-alcohol campaign caused a large budget shortfall at a time when economic growth was stalling out. Critical components of the bureaucracy, in particular agriculture, energy, and the military, demanded enormous subsidies and resisted reform at every turn, because improving efficiency via market incentives would have eroded the power of the central bureaucracy. As the Soviet budget deficit ballooned, it could only be filled by either limiting consumers' access to price controlled goods (including basic foodstuffs), or printing money and causing hyperinflation. Miller argues that the August coup of 1991 failed because there was no way to fund the apparat besides diverting already scarce resources from civilian consumers, which would likely have caused mass hunger. Money quote: "Stalin tolerated famine in the early 1930s when he was gathering capital for industrialization, but the leaders of the 1991 coup were not nearly so ruthless." In all, this picture is highly compatible with the Acemoğlu and Robinson (2012) view that when power is held by a small clique of powerful insiders, they often have more to lose than to gain from pro-growth reform.
In terms of broader lessons, this may be a good case study of the middle income trap. Countries can industrialize by force of will, as Stalin showed in the 1930s, but the transition to higher order output and services may require relatively liberal markets and financial sectors that are willing to punish losers, which will ultimately be inimical to entrenched interests. Argentina's chronic troubles come to mind. And although China was much better able to enact market reforms in the 1980s than the Soviets were, a big part of the reason was how impoverished they were. The party cadres had little to lose. At this point, that's not the case anymore, and it's not so hard to imagine a situation in the near future where their growth engine loses steam and exposes a lot of conflicts that have been easy to sweep under the rug in a period of constant growth.
Finally, it's worth noting that the United States faces similar tensions, such as the constant rise of health care costs and a ballooning budget deficit, which are symptomatic of a political system that is increasingly becoming deadlocked. The US has never had trouble resolving this sort of issue in the past, but it is possible that our newfound polarization has rendered us much less capable.
In any event, this book was wonky but also thought-provoking, and the collapse of the Soviet Union has not gotten the attention it deserves.
In Miller's telling, far from being a unified dictatorship, the Soviet Union under Gorbachev became mired in political gridlock, ultimately unable to solve a budget crisis. Gorbachev's anti-alcohol campaign caused a large budget shortfall at a time when economic growth was stalling out. Critical components of the bureaucracy, in particular agriculture, energy, and the military, demanded enormous subsidies and resisted reform at every turn, because improving efficiency via market incentives would have eroded the power of the central bureaucracy. As the Soviet budget deficit ballooned, it could only be filled by either limiting consumers' access to price controlled goods (including basic foodstuffs), or printing money and causing hyperinflation. Miller argues that the August coup of 1991 failed because there was no way to fund the apparat besides diverting already scarce resources from civilian consumers, which would likely have caused mass hunger. Money quote: "Stalin tolerated famine in the early 1930s when he was gathering capital for industrialization, but the leaders of the 1991 coup were not nearly so ruthless." In all, this picture is highly compatible with the Acemoğlu and Robinson (2012) view that when power is held by a small clique of powerful insiders, they often have more to lose than to gain from pro-growth reform.
In terms of broader lessons, this may be a good case study of the middle income trap. Countries can industrialize by force of will, as Stalin showed in the 1930s, but the transition to higher order output and services may require relatively liberal markets and financial sectors that are willing to punish losers, which will ultimately be inimical to entrenched interests. Argentina's chronic troubles come to mind. And although China was much better able to enact market reforms in the 1980s than the Soviets were, a big part of the reason was how impoverished they were. The party cadres had little to lose. At this point, that's not the case anymore, and it's not so hard to imagine a situation in the near future where their growth engine loses steam and exposes a lot of conflicts that have been easy to sweep under the rug in a period of constant growth.
Finally, it's worth noting that the United States faces similar tensions, such as the constant rise of health care costs and a ballooning budget deficit, which are symptomatic of a political system that is increasingly becoming deadlocked. The US has never had trouble resolving this sort of issue in the past, but it is possible that our newfound polarization has rendered us much less capable.
In any event, this book was wonky but also thought-provoking, and the collapse of the Soviet Union has not gotten the attention it deserves.
March 26, 2022
Exceptionally well-researched book on the failure of the Soviet economic system. The soviet command-administrative system was unreformable and the author proves it with fact-based evidence obtained from several Soviet-era policies. The case for the failure of the Soviet economy is strengthened by the fact that powerful interest groups within the soviet socio-economic system disagreed completely with any meaningful reforms. The failure to balance the state budget and cut the wasteful spending accelerated the inevitable collapse of the Soviet economic system.
November 10, 2017
Great overview of Soviet attempts at economic reform in the Gorbachev era looking at how the Soviets attempted to model many of their reforms based on what the Chinese did, but failed in large part due to institutional arrangements and the power of various agents the Soviets met stiffer resistance than the Chinese did.
August 26, 2017
A highly erudite overview of what transpired during the disintegration of the Soviet Union. You do not have to be an academic to read this book. Dr. Miller's writing is crystal clear and easy to read. He makes understanding the dissolution of the Soviet Union quite easy.
September 23, 2017
Like many academic titles these days, could've benefited from some more thorough editing. But the basic argument is convincing and well-supported, and is crucial for anyone wanting to understand the fall of the USSR.
June 22, 2024
Miller's basic argument is that entrenched interests in the Soviet economy frustrated Gorbachev's attempts at Chinese-style economic reforms or forced him to buy them off with increased capital investments that drove inflation. It was an interesting read, especially after Zubok's "Collapse," whose narrative focused on the political intrigue between Gorbachev, republic bosses, and intellectuals—closely mirroring Gorbachev's preference for the lofty world of law, congresses, and state visits instead of dismal economics.
The books also hold a fundamental contradiction here: Miller's thesis is the failure of Gorbachev's reforms was overdetermined by opposed interested groups, whose institutional power was overdetermined by the particulars of collectivization, industrialization, and siege communism. Zubok concentrated on the Gorb-factor, giving a play-by-play recounting that doesn't lend itself to a single argument—instead illustrating a torrent unleashed by decentralization and the weakening of the party. This is epitomized by the 1991 August Coup: Zubok sees it as a tragi-comedy of chaotic personalities, Miller as a calculated (though incorrectly) attempt by economic and military elites to preserve their power amid reform.
Also notable is the contrasting roles of the West/Asia. In Zubok's world of ideas, the West is the civilized and liberal "forbidden fruit" of the Soviet intelligentsia's imaginary. "Russia [would have to] bury its imperial dreams, in order to stay in Europe. Otherwise, it would have to look for its place in Asia." In Miller's world of economics, however, Soviet recognition that the Asian Tigers and China represented more realistic, adaptable, and even faster-growing alternatives to comparatively inefficient Euro-American economies is explicit. “We are only at the beginning of the path to the future of the world’s great Asian and Pacific region.”
Overall, a convincing book with some (depressing) omissions. Despite Miller's apparent contempt for the Soviet system, he acknowledges that the social benefits it provided to ordinary citizens inhibited reform even if he couches it in terms of vague 'institutions' and unsympathetic bureaucrats instead of tangible effects on people's lives. The low-cost, labour-intensive, and disciplined work that enabled the Asian tigers could not have been adopted while preserving an entrenched socialist system. Soviet institutions provided too much for most of its citizens to sacrifice it!
The books also hold a fundamental contradiction here: Miller's thesis is the failure of Gorbachev's reforms was overdetermined by opposed interested groups, whose institutional power was overdetermined by the particulars of collectivization, industrialization, and siege communism. Zubok concentrated on the Gorb-factor, giving a play-by-play recounting that doesn't lend itself to a single argument—instead illustrating a torrent unleashed by decentralization and the weakening of the party. This is epitomized by the 1991 August Coup: Zubok sees it as a tragi-comedy of chaotic personalities, Miller as a calculated (though incorrectly) attempt by economic and military elites to preserve their power amid reform.
Also notable is the contrasting roles of the West/Asia. In Zubok's world of ideas, the West is the civilized and liberal "forbidden fruit" of the Soviet intelligentsia's imaginary. "Russia [would have to] bury its imperial dreams, in order to stay in Europe. Otherwise, it would have to look for its place in Asia." In Miller's world of economics, however, Soviet recognition that the Asian Tigers and China represented more realistic, adaptable, and even faster-growing alternatives to comparatively inefficient Euro-American economies is explicit. “We are only at the beginning of the path to the future of the world’s great Asian and Pacific region.”
Overall, a convincing book with some (depressing) omissions. Despite Miller's apparent contempt for the Soviet system, he acknowledges that the social benefits it provided to ordinary citizens inhibited reform even if he couches it in terms of vague 'institutions' and unsympathetic bureaucrats instead of tangible effects on people's lives. The low-cost, labour-intensive, and disciplined work that enabled the Asian tigers could not have been adopted while preserving an entrenched socialist system. Soviet institutions provided too much for most of its citizens to sacrifice it!
January 30, 2021
Why did Chinese communism successfully reform itself while soviet communism collapsed? This is probably one of the most important questions of the 20th century and this book is a great answer.
Russian reformers knew what the Chinese were doing, they knew why it worked and essentially wanted to repeat it. So why did they fail?
China was very poor, so few people had a lot to loos, the cultural revolution had destroyed everything that could be considered an entrenched interest group and had low wages and was thus attractive for foreign capital.
In the USSR the obvious was the case. As soon as Gorbachev lifted political repression the Soviet union was living on borrowed time unless there could be a rise in welfare of the population. In order to get economic liberalisation through the central committee Gorbachev was forced to take on lots of debt to satisfy the big industrial groups demands for more investment. He hoped that this could lead to a rapid rise in productivity to pay it back. This did not materialize. The problems in soviet industry were so deep they could not just be solved by more investment.
At this point inflation was rampant and because price ceilings were still in tact shortages were mounting. At this point you need to press the austerity button. Someone needs to pay. Gorbachev knew it couldn't be consumers or his agenda was dead. The interest groups didn't want it to be themselves and they had enough power to slow down or stop most of what Gorbachev wanted to do. And so things started to go downhill.
This is why the author says the reason why the effort in the USSR were doomed from the beginning.
The book is great. A bit repetitive at times. Go read it.
Russian reformers knew what the Chinese were doing, they knew why it worked and essentially wanted to repeat it. So why did they fail?
China was very poor, so few people had a lot to loos, the cultural revolution had destroyed everything that could be considered an entrenched interest group and had low wages and was thus attractive for foreign capital.
In the USSR the obvious was the case. As soon as Gorbachev lifted political repression the Soviet union was living on borrowed time unless there could be a rise in welfare of the population. In order to get economic liberalisation through the central committee Gorbachev was forced to take on lots of debt to satisfy the big industrial groups demands for more investment. He hoped that this could lead to a rapid rise in productivity to pay it back. This did not materialize. The problems in soviet industry were so deep they could not just be solved by more investment.
At this point inflation was rampant and because price ceilings were still in tact shortages were mounting. At this point you need to press the austerity button. Someone needs to pay. Gorbachev knew it couldn't be consumers or his agenda was dead. The interest groups didn't want it to be themselves and they had enough power to slow down or stop most of what Gorbachev wanted to do. And so things started to go downhill.
This is why the author says the reason why the effort in the USSR were doomed from the beginning.
The book is great. A bit repetitive at times. Go read it.
June 4, 2022
The book argues that the reasons Soviet privatization went so disastrously in comparison to China are chiefly political. There simply were too many powerful interest groups being fattened on existing corruption — particularly agriculture, energy, and military lobbies — that opposed economic reform. When economic reforms were dictated from the center, they were often ignored or misapplied by members of these interest groups; and the political center (Gorbachev) was too threatened by the prospect of his own displacement to flatten his opponents. This is in contrast to China where Deng was able to minimize the military’s power and actually push through his reforms. Ironically, it may be that the relative prosperity of the USSR (versus China) gave entrenched interest groups more desire to maintain the status quo — in Russia many agricultural producers wanted to continue receiving massive subsidies from the state and not having to work too hard; in China the agricultural workforce was so immiserated that they readily embraced reform. Trying to placate these interest groups, the government budget spiraled out of control while reform got underway, leading to hyperinflation and recession.
Or at least that is what the book argues. For my taste, the scholarship is too qualitative and narrative based. It is true that arguing for political as opposed to economic primacy must involve more qualitative judgments, but for a book whose topic is the Soviet economy I think a greater focus on the data would have benefitted the analysis. Nonetheless, I tentatively believe its conclusions, and they provide good evidence for a sort of Acemoglu/Robinson or North view of institutions/politics as the precondition for economic success.
Or at least that is what the book argues. For my taste, the scholarship is too qualitative and narrative based. It is true that arguing for political as opposed to economic primacy must involve more qualitative judgments, but for a book whose topic is the Soviet economy I think a greater focus on the data would have benefitted the analysis. Nonetheless, I tentatively believe its conclusions, and they provide good evidence for a sort of Acemoglu/Robinson or North view of institutions/politics as the precondition for economic success.
January 13, 2022
I guess the main tack-away from this professional analysis of the collapse of the Soviet Union is this 2 points:
1)Gorbachev and his men did not copy western capitalism and were not classical liberals. True there were a few "hidden in the closed" capitalists and classical liberals with Hayek books under their bed but they were not instrumental in the changes that happened. The Soviet Union studied and attempted to copy Chinese style liberalization.
2)China style free market liberalization and budget cuts would have been good for Russia, and Gorbachev wanted to implement them but was blocked by powerful interest groups in the control economy. China did not have such powerful interest groups because: the bureaucracy did not yet recover from Mao as did the Urssr one had time under Brejnev; Russia had already a large industrial complex that was inefficient yet could not be simply removed without political opposition and pain of economic readjustment, this while China had nothing, china afforded to let private competition because it did not have any strong state industry that would suffer from real competition.
1)Gorbachev and his men did not copy western capitalism and were not classical liberals. True there were a few "hidden in the closed" capitalists and classical liberals with Hayek books under their bed but they were not instrumental in the changes that happened. The Soviet Union studied and attempted to copy Chinese style liberalization.
2)China style free market liberalization and budget cuts would have been good for Russia, and Gorbachev wanted to implement them but was blocked by powerful interest groups in the control economy. China did not have such powerful interest groups because: the bureaucracy did not yet recover from Mao as did the Urssr one had time under Brejnev; Russia had already a large industrial complex that was inefficient yet could not be simply removed without political opposition and pain of economic readjustment, this while China had nothing, china afforded to let private competition because it did not have any strong state industry that would suffer from real competition.
June 29, 2022
As a novice in both Russian and economic history, I found Chris Miller's book eminently readable and enlightening. It really added a new dimension to my understanding of why the Soviet Union fell. Miller argues that industry, big agriculture, and the military were so powerful and so resistant to economic changes that Gorbachev could not have saved the Soviet Union from economic collapse. Miller's argument is not the only one out there, but it seems credible to me. I also appreciated the comparisons to China's economic reforms.
The book gets a little redundant by the end, but it's a short read, so it's not a big problem.
The book gets a little redundant by the end, but it's a short read, so it's not a big problem.
June 19, 2023
I love this - a topic that is very interesting to me yet surprisingly under the radar. No one ever talks about the events leading up to the dissolution of the Soviet Union anymore. Its parallel to the rise of the China is very insightful, and I like how it is presented in a very accessible way. I read it over a three-day beach vacation where people were like, what on earth are you reading on your vacation?! Then I tell them about the actual “story line” and folks said, ok, you are not crazy 😂
January 17, 2025
A nice concise description about the forces that caused the collapse of the Soviet Union in 1991.
I had no idea how screwed up the Russian Communists were in the 1980's decade and how unable they were to make the necessary changes to allow the Communist Party to keep the Soviet Union from collapsing into depression
I had no idea how screwed up the Russian Communists were in the 1980's decade and how unable they were to make the necessary changes to allow the Communist Party to keep the Soviet Union from collapsing into depression
May 7, 2017
The point that the Soviet Union was simply unreformable is well illustrated.
September 24, 2022
8.5/10
May 30, 2024
Thank you very much for this book. This book made me realize that the Soviet Union was hopeless. This book made me determined to leave China.
December 20, 2024
Repeat the same idea over, and over, and over again.
February 26, 2025
This book is great. Probably the best easily readable analysis of the pressures facing the USSR that made it almost impossible to save.
January 8, 2024
this book is not a comparative economic study of eastern bloc reform in the 60s, china, and russia. it is a political analysis of the soviet union & somewhat less china with superficial comparative economic analysis. this is not to say miller’s work isn’t impressive. & i am quite honestly impressed w the entire soviet history department at michigan.
though i don’t really agree w the theory that like gorby couldn’t have saved the union even if he wanted. scary spooky powerful farm interests. this book does praise kosygin and for that alone i give it 4 stars. anything that furthers the good word of Kosyginism is a big recommend in my book. no but i do recommend this for anyone specializing in a socialism economy like hungary or poland.
though i don’t really agree w the theory that like gorby couldn’t have saved the union even if he wanted. scary spooky powerful farm interests. this book does praise kosygin and for that alone i give it 4 stars. anything that furthers the good word of Kosyginism is a big recommend in my book. no but i do recommend this for anyone specializing in a socialism economy like hungary or poland.
Displaying 1 - 22 of 22 reviews