The former Soviet Union was not a good place for its citizens, who suffered from chronic shortages of consumer goods. The goods they had were generally less than what was available in the West.
During its nearly seven decades of existence from 1922 to 1991, the Union of Soviet Socialist Republics was one of two major communist powers – the other being China – that followed the central planning model of its economy, a basic principle of communism.
As such, ordinary citizens of the Soviet Union were generally not allowed access to imported consumer goods, especially those made in the United States. Also known as the âIron Curtain,â the Soviet economic system called for self-sufficiency in everything from bread and clothing to cars and fighter planes.
The Soviet Union failed for a number of reasons. Political analysts say the Soviet economic system was inferior to the free market economy adopted by the United States and most Western countries.
The input-output analysis developed by Nobel Prize-winning economist Wassily Leiontief views the economy as a network of interconnected industries; the output of one industry is used as an input by another.
Centralized planning, however, left little room for rapid adjustments in the event of errors in judgment or external factors beyond the control of the state. When one industry failed, other industries followed suit.
By the mid-1980s, the Soviet Union controlled 98% of retail trade. Private companies were taboo. Only small family farms in rural areas have remained in private hands.
In the meantime, the countries surrounding the Soviet Union in the post-war years had grown into economic powers producing consumer goods that dramatically improved the quality of life for citizens who could afford them. With German cars, French perfumes, Italian wines, and British-made appliances, West Europeans lived well compared to their Soviet counterparts, who had become accustomed to long queues whenever the supply chain from farm to market was disrupted.
Worse yet, consumers in the Soviet Union had developed a taste for foreign products, such as Levi jeans made in the United States, although similar clothing made in the Soviet Union was available at lower prices. It didn’t matter that the jeans were smuggled and sold at excruciating prices. Soviet consumers had just enough exposure to the outside world to familiarize themselves with what was available and to demand better quality products than the Soviet economic system could provide them.
Throughout its history, the Soviet Union tried to instill in its people the message that consumerism was an evil that only belonged to the decadent West. Soviet consumers believed the opposite, which is why they welcomed perestroika and the collapse of the USSR.