Crisis

This chapter shows the Soviet economy was a catch-up economy. It explains that such economies have two main sources for their extensive growth, technological emulation and transfer of labour-power from countryside to town, and that these two main sources of growth are also the limits of these types of economies. This chapter shows that the Soviet economy’s growth slowdown was due to its difficulties importing more Western technology, adopting and spreading technology and difficulties in terms of technological innovation, as well as due to the slowing down of the transfer of labour-power from agriculture to industry. In order to get out of this crisis, it indicates that not only did the productivity of labour need to be raised, but that there was a need to intensify labour. However, attempts to reform the Soviet economy were blocked, resulting in the collapse of the Soviet Union. The chapter briefly describes the aftermath.