The golden age and Soviet-Union growth

THE GOLDEN AGE AND SOVIET UNION GROWTH 1

The golden age and the Soviet Union growth

The European economic ‘Golden Age’ took place after the end ofthe Second World War. Some of the major highlights of this time werethe post-war reconstruction, and governmental efforts to catch upwith well-developed European countries and America. The aim was toreach the levels of production that would help the countries’economies stabilize after the war, which had left them destroyed.During the golden age, European countries, among them the SovietUnion, embarked on industrial expansion. The Soviet Union hadtargeted a 5% per annum industrial growth to sustain long-termeconomic ambitions (Aldcroft, 2001). Despite there existing some mildforms of cold war soon after the war, the Soviet Union adopted asocial market economy that focused on cooperation with some nationsthat had the same economic ambitions. However, while the economicmodel of a majority of the Western Nations, the USA included, wasliberal, the Soviet Union’s system was state controlled

Thegovernment of the Soviet Union committed to employment as a keyeconomic objective. The political leaders had an agreement thegovernment would control the major elements of economic growth,specifically production and distribution of resources. This way, thegovernment was able to balance between social and economicdevelopment. This helped the Soviet Union to realize positiveinternal growth, while at the same time, promote long-term stabilitythat was required to place them high in the global economic ratings.The workers’ wages increased significantly, which motivated them toincrease their input and contribute to national growth. According toCrouzet (2001), the aim of the Soviet Union government was to ensurethat its economy would compare with and if possible, beat that of thewestern nations, especially the United States. Along with this, theSoviet had ensured that the needs of the people had to be met withsufficiency, so to keep the huge geographical territory under thesame political rhythm. A strong economy would only be sustained by anundivided political force. However, the Soviet Union would laterdisintegrate due to mounting political, social and economicpressures.

Thepolitical and economic progress of the country was quite remarkableduring the golden age, despite there being stringent restrictionsfrom the Western nations, due to the dictatorial nature of theregime. According to Nove (1993), the government ensured that theeconomic growth would be protected by equal military growth. As such,they spent quite a lot of resources to expand the military. Stalin’sgovernment, and others after him, were able to influence significantpolitical and social growth that helped the citizens to acknowledgeand appreciate their position in the global economic and politicalplatform.

The economic evolution of the Soviet Union during the golden age wasnot compact. Nove (1993) says that it can be divided into three mainphases. All these phases correspond to different levels of economicgrowth. In the first phase, which began shortly after the end of theSecond World War, ending in 1970, was a period of significant growthof the GDP. Along with this, there was a lot of accumulation ofcapital, which enabled the government to support various economicsectors in the country. However, the country’s trade structureswere limited in the size of the foreign trade. The reason behind thiswas that the most developed nations in the West had economic systemsthat did not resonate with that of the Soviet Union. Alongsideindustrial growth, there was significant agricultural progress.

However,after the first phase of development, there was a period of economicstagnation. The stagnation took place for a decade, beginning in 1974(Nove, 1993). During this period, the Soviet Union recorded anaverage GDP growth of less than 1 percent, far less than what thegovernment was planning. This slump was associated with thetraditional economic model that the government had stuck to. Amongthe major issues was the lack of skilled labor. Additionally, pooragricultural practices had led to decreased agricultural production,which slowed down the sector’s growth. Natural resources, which hadbeen significant for growth during the previous phase, were also fastdeclining. The Soviet Union found itself having to move into a periodof intensive accumulation. Nothing much changed during the thirdperiod. However, after major political changes during that time, theSoviet Union was able to find its way back to significant economicgrowth.

Whilesummarizing the growth in the Soviet Union during the golden age,Gill &amp Raiser (2012) assert that the living standards of thepeople were one of the key indicators of the same. Additionally,despite there being a heavy restriction on the East-West trade, theSoviet Union was able to record growth and stability that matchedthat of the Western nations. When compared against the aftermath ofthe first World War, the golden age that followed the Second WorldWar marked by rapid recovery. The nation was able to attainbenchmarks and hit targets that placed it as one of the mostdeveloped countries in the world during that period.

References:

Aldcroft, D. H. (2001). The European Economy 1914-2000. PsychologyPress.

Crouzet, F. (2001). A history of the European economy, 1000-2000.University of Virginia Press.

Gill, I. S., &amp Raiser, M.(2012).&nbspGoldengrowth: Restoring the lustre of the European economic model.World Bank Publications.

Nove, A. (1993). An economic history of the USSR: 1917-1991, 3rdEd. Penguin Books.