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Words: | Submitted: Mon Jun 19 2006
... due to the fixation of prices, unlike free markets, where the price of goods would be determined on supple and demand all prices remained rigidly set by the Kremlin. Thus meaning when the subsequent arms race began with the United States occurred, money that was needed to help maintain the fragile economy was spent on military expenditure, something of which the Soviet citizens benefited little from. The economy also relied a great deal on tax and revenue from goods bought, so when the USSR began an anti-alcohol campaign a great deal of money was lost putting more strain on the economy. The economic failure however, is intertwined with Gorbachev's policies and attempts at reform. However the economic views outlined above were just in the years preceding the collapse of the USSR, in the era of Stalin the rate of industrialisation and the economic state of the country was very strong, ...
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