History presentation script

What impact did Gorbachev have on Soviet and international relations/ was he
responsible for Communism's collapse?

Slide 1 (perestroika and collapse of Soviet economic system):

In June 1987, the Soviet Joint Venture Law was created, which allowed foreigners to
invest in the Soviet Union in the form of joint ventures with Soviet ministries, state
enterprises and cooperatives. It limited foreign shares of a Soviet venture at 49% and
required that Soviet citizens occupy the positions of chairman and general manager.
Eventually, due to potential Western partners complaining, the law was amended to
allow a majority share for foreigners.

In July 1987, the Supreme Soviet of the Soviet Union passed the Law on State
Enterprise. The law stipulated that state enterprises were free to determine the output
levels based of demand from consumers and other enterprises. Enterprises had to
fulfil state orders, but they could dispose of the remaining output as they wanted. The
state still held control over the means of production for these enterprises, thereby
limiting their ability to enact full-cost accountability. Under this new law, enterprises
also became self-financing, meaning the government no longer had an obligation to
cover their expenses or bail out unprofitable enterprises that faced bankruptcy.
Finally, the law shifted control over enterprises from ministries to elected workers’
collectives.*Gosplan’s responsibilities had now shifted from formulating detailed
production plans, to supplying general guidelines and national investment priorities.
*Gosplan was the agency responsible for central economic planning in the USSR.
Until the Law on State Enterprise was passed, its main task was the creation and
administration of a series of five-year plans.

In May 1988, a new law called the Law on Cooperatives was enacted. This law
permitted private ownership of businesses in the services, manufacturing, and
foreign-trade sectors for the first time since Lenin’s New Economic Policy (NEP)* was
abolished in 1928. Initially, it imposed very high taxes and employment restrictions,
but later modified them to avoid discouraging private sector activity in the country.

*The NEP was an economic policy of the USSR proposed by Lenin in 1921 as a
temporary measure deemed necessary after the Russian Civil War. It included a free
market and capitalism, both subject to state control, while socialized state enterprises
would operate on a profit basis. It was implemented to boost the country’s economy
which was in ruins since 1915.
Under these new enterprise managers, hidden inflation* rose by a lot. In 1986, hidden
inflation was at 4.6% and this increased to 19% in 1990 and 200% by the end of 1991.
This was because the earnings of enterprises rose faster than their productivity and
independently from real sector growth. On top of that, wages were drastically
increased. For example, in 1989, there was a 10.9% increase in earnings within
industrial enterprises while output had only increased by 1.7%. You might be
thinking: If the wages were increased, then why did most people not obtain better
lives and buy more? The answer is, because of a savings problem that the USSR had
since the 70’s that was only made worse by the increase in wages. Due to food prices
being subsidized and shortages on the consumer market with regard to choice not so
much quantity, workers chose to save part of their income in the hope that they could
spend it in the future on consumer goods and services, such as a car, holidays, or
even black-market items. This created a great disparity between income and
spending. The gap became larger over time. In addition, people now had a lot more
money from their salaries. This caused people to buy a lot more since they had more
money and as a result there were shortages of many products, especially foods such
as meat, fish, and fruits. As a direct consequence, there were also long queues since
many things weren’t in stock due to production not adapting to the new demand. In
response, many people turned to buying and selling on the recently legal somewhat
free market, such as in non-government food marketplaces. The Law on Cooperatives
also caused problems since the managers of the markets would set prices a lot higher
than people were willing to pay, to make a large profit. Cooperatives also bought
products from state stores and sold them at inflated prices, further increasing hidden
inflation which was taken advantage of in now legal non-state-controlled markets.
Now, you had a situation where most Soviet people couldn’t afford the prices of the
cooperatives but had to wait for 2 hours in a queue to maybe get some meat. Also, the
agricultural sector realised that they could make more money selling the produce to
the private sector than to the state. The different regions and cities in the USSR
experienced this differently. Cities and regions dependent on others for their food,
such as major cities were often worst off because the local authorities of food
producing regions wanted to keep the food for their own populations. That’s why
people in villages or cities within the same region of a collective farm, in fact had a
surplus of food. However, the vast majority of people in the Soviet Union weren’t
hungry yet, until the 90’s.
*hidden inflation was the inflation in non-state markets, e.g., the newly legal free
marketplaces.

At the time, Perestroika’s economic policies were considered radical by Soviet

economists. In Gorbachev’s mind, these new policies were supposed to increase the
contact and cooperation between Soviet consumers and suppliers and their foreign
counterparts. After these major economic changes occurred, government spending
vastly increased, leading to massive deficit, a rise in inflation and food prices. This
was largely due to the fact that the previously highly subsidized agricultural sector
was now producing food for profit and not selling it at the formerly controlled prices.
Gorbachev is widely criticized for dismantling the Soviet economic system without
proposing an alternative which eventually led to the “Shock Therapy” of the 90’s
capitalism. While his economic policies had relatively good intentions, they were a
complete failure and only led to the country’s economic collapse a few years later.
However, political instability didn’t help either.

Slide 2 (Dissolution of USSR and Yeltsin):

On the 14th of March 1990, there was a presidential election in the USSR. This was the
first presidential election ever since the post of president had been created earlier
that year. Gorbachev won the final vote by only 46 votes. However, the only people
allowed to vote in the election were members of the Congress of People’s Deputies*.
However, just because he won, doesn’t mean he was popular. Gorbachev repeatedly
threatened to resign if the required two-thirds majority was not achieved. Gorbachev
was also facing a lot of criticism from reformers and communist hardliners.
Reformers such as Boris Yeltsin were complaining that his reforms weren’t quick
enough, on the other hand, communist hardliners were appalled by Gorbachev’s
retreat from Marxist principles. Gorbachev also isolated traditional communist
politicians that tried to reverse his reforms.
*The Congress of People’s Deputies was created in 1989 as part of Gorbachev’s
perestroika.

At the same time, Boris Yeltsin was elected chairman of the Supreme Soviet of the
RSFSR, despite Gorbachev asking the Russian deputies not to elect him. He was
supported by both democratic and conservative members of the Supreme Soviet
which sought to gain power to rival Gorbachev. Yeltsin would then go on to win the
1991 Russian, not Soviet presidential elections, this time involving the Russian public
with 57% of the vote. The reason it was Russian and not Soviet was because on the
12th of June 1990, the declaration of state sovereignty of the Russian SFSR was
ratified, with Yeltsin as its leader.
On the 18th of August 1991, a coup was staged against Gorbachev by hard-line
communists. While Gorbachev was in his Crimean dacha, he was visited by his chief
of staff and a KGB General. They came to demand that Gorbachev sign a document
declaring a state of emergency and a transfer of power to his vice president. When
Gorbachev refused, he and his family were placed under house arrest. On August 19th,
radio stations had proclaimed that “ill health” had prevented Gorbachev from
executing his duties and that Yanayev, the vice president, had assumed the powers of
the presidency. Yanayev and his committee quickly issued a resolution which banned
strikes and demonstrations and imposed press censorship. The timing of the coup
was in accordance with a new union treaty to be signed on August 20th, which would
weaken central control over the republics. It is worth noting that most of the USSR
Cabinet of Ministers supported the coup.
Soon, tanks were sent onto the streets of Moscow and protesters began gathering
around the Russian parliament building and erecting barricades. At 12:50pm, the
Russian President Boris Yeltsin climbed atop a captured tank in front of the
parliament building and called for an immediate general strike. On August 20th, Yeltsin
stated that he was taking control of all military, KGB, and other forces in Russian
territory. That night, fighting broke out between troops and demonstrators near the
presidential building and three protestors were killed. The coup had failed, and the
plotters were arrested. Gorbachev was reinstalled and Yeltsin decreed that all
enterprises in Russia were under his governments control.

In conclusion, it is worth noting that during the Soviet Union’s 69-year existence, it
accomplished many things in the fields of technology and medicine, also in women’s
rights and racial equality, something that the rest of the world lacked. The Soviet
system, while flawed in its economics, showed the benefits of having a free world
class education system which created world class scientists and engineers, enabling
it to win WW2 and playing a leading role along with the USA on the world stage. On
the 17th of March 1991, there was a referendum on the future of the Soviet Union. The
aim was the approval of the Union of Sovereign States. 77.9% of the votes were in
favour, coming from all the republics except the Baltics, Moldova, Georgia, and
Armenia, which had boycotted the vote. Despite this, the USSR was dissolved on the
8th of December 1991 by Boris Yeltsin and the Russian first deputy prime minister, the
Ukrainian president and prime minister, and the Belarussian chairman and prime
minister in the Belavezha Accords. So, I think it is safe to say that Gorbachev was
responsible to the economic collapse of the USSR and responsible for the political
instability. As a result, I consider him responsible for the collapse of communism in
the USSR. Had he taken a path similar to China, things would’ve turned out
differently.

Thank you for listening.

References:
https://www.history.com/news/did-perestroika-cause-the-fall-of-the-soviet-union
http://www.diva-portal.org/smash/get/diva2:1111554/FULLTEXT01.pdf
https://dc.etsu.edu/cgi/viewcontent.cgi?article=2667&context=etd
https://www.jstor.org/stable/152269?seq=1
https://en.wikipedia.org/wiki/Perestroika
https://www.ucis.pitt.edu/nceeer/1992-806-36-3-Moskoff.pdf
https://www.history.com/this-day-in-history/gorbachev-elected-president-of-the-
soviet-union
https://www.britannica.com/topic/Soviet-Coup-of-1991
https://deepblue.lib.umich.edu/bitstream/handle/
2027.42/67596/10.1177_000276427101500208.pdf?sequ