Looking back at the USSR

We live in a world mostly dominated by capitalist countries and a strong faith in the market forces of supply and demand. There are only a handful of communist countries left and even these few remaining vestiges are tinged with capitalist enterprises. For us, it’s easy to look back at the 20th century and see how the battle between capitalism and communism would inevitably lead to the triumph of capitalism, but this wasn’t always the case. For much of the 20th century, it looked like each side had an equal chance of winning. During the stagflation of the U.S. throughout the 1970s, which spilled out into other capitalist countries, the ostensible failure of capitalism led many to believe that it was a system doomed to fail. Even now, as income inequality worsens and more and more people fall out of the middle class, many are embracing the idea of a socialist system as an alternative. In the current Democratic party, there is friction developing between moderate factions and progressive factions, some of whom are opening up to the idea of “democratic socialism,” which would be similar to the version adopted by Nordic countries. For these reasons, I thought it would be helpful to look back at the most famous socialist country in history, the USSR.

First, I want to make the distinction between socialism and communism. Essentially, they are arguing for the same thing, centralization of industry and state ownership of capital, but the means by which they go about this are different. Whereas socialism argues for a slower, more democratic move toward a system free of private ownership of capital, communism argues for a revolutionary, often violent, takeover of the economy. There are plenty of arguments surrounding this, and I cannot do all of them justice in this piece, but this is simply the most basic difference, which can serve as a starting point. The Soviet Union was unabashedly socialist and so were many other countries, although it is worth noting that not all “socialist” countries practiced the same thing. For instance, all property in the Soviet Union was owned by the state and doled out to the people based on an application process, but in Cuba it was possible for people to own land themselves. Even though each country practiced its own version of a socialist system, the Soviet Union, being the first to do so, largely set the stage for socialism around the world.

It is a common myth that during the Russian Revolution of 1917, all of Russia stood ready and waiting to embrace Vladimir Lenin and Marxist ideals after the apparent failure of the Tsarist system. In fact, much of Russia knew almost nothing about Marxism and when the Bolsheviks took over, they were only nominally in control. Their movement was mostly confined to small circles of dissatisfied factory workers and leftist intellectuals. A long and bloody Civil War then ensued following their takeover, which the Bolsheviks eventually won. All of this goes to show that the move to a socialist system in Russia, and the development of the Soviet Union itself, was a gradual and somewhat improvised process, rather than happening all at once. The basic contours of a socialist system that we commonly associated with them, like five-year plans and the Gulags, did not really start to take shape until the late 1920s. So before I dive into how the Soviet Union worked, I want to make it clear that all of this took a while to get going and was often in flux while it operated.

The basic tenets of the Soviet Union were state ownership of all capital, which included land, factories, machinery, and anything else that a business can use to produce goods. Everything was organized along a specific plan. Unlike in the U.S., where the laws of supply and demand rule everything, all prices were decided ahead of time and all goods-producing businesses had to meet specific production quotas. All of this was detailed in a five-year plan, which was put out by a government entity called Gosplan. Every industry had its own minister, who oversaw all production within that industry. Unlike the U.S. economy, which is dominated by consumers and meeting consumer needs, the economy of the Soviet Union was structured according to the needs of the state and whatever was needed to protect the interests of the state. As such, there was a focus on heavy industry, rapid industrialization, and the collectivization of agriculture. This may seem like an oddity to those who grew up in a capitalist system, as one may venture to the USSR and find very little consumer goods like makeup, but find an abundance of tractors. Certain other oddities abound, such as how people purchased cars. In the U.S., if you want a car, you would go to the dealership, probably take out a car loan, and hopefully walk away with a new car. In the Soviet Union, you would have to apply to the appropriate government agency for a car, who would consider your application and get back to you, usually a long time after, with a car. On top of this, the housing was largely composed of apartment complexes that were designed to promote a sense of communal, dormitory-style living that would help instill socialist ideals in the populace and produce faith in the system. This is in stark contrast to the single-family style homes that are popular here in the U.S.

For the average person in the Soviet Union, if you wanted something without having to wait a long time, you usually had to know someone high within the government structure who could grease the wheels and help things move along. This led to endemic corruption and the development of a “second economy” composed of black market deals and bargaining. Moreover, the entire system could become mismanaged if certain regions or industries failed to meet their quotas or lied about meeting their production targets to avoid punishment. Sometimes, this was a result of state planners implementing unreasonably optimistic quotas. It is worth mentioning that the Soviet Union had its own currency, even though Vladimir Lenin initially tried to implement a system without currency, and they regularly traded with the outside world. In fact, much of their grain was imported from the U.S. Given that there was such a heavy push for industrialization, and old Russia lacked the necessary machinery to facilitate this industrialization, they had to import much of their machinery from developed countries, like Germany. To do so, they had to maintain a stead supply of foreign currency, which they did by exporting their own goods, like agricultural goods, even if there was already a shortage of such agricultural goods within their borders. Everything was based around the needs and interest of the state, which often meant defense and industrialization.

Looking back at the USSR, we can see how an actual socialist system developed and organized society along its lines. Concerning those who espouse socialism today in the U.S., they are more often than not advocating for a watered-down version of the kind of socialism found in the Soviet Union, which would look similar to the kind found in Scandinavian countries. It would be exceptionally difficult to implement Soviet-style socialism in the U.S. today. Going forward, it is important to approach debates about socialism and its implementation by looking back at how similar systems played out in real societies, not just in the USSR, but other countries like Cuba, China, or Vietnam and use these real-life examples to develop more constructive debates.