12 July 2014

High Oil Prices and the Brezhnev Era

From Revolutionary Russia, 1891-1991: A History, by Orlando Figes (Metropolitan, 2014), Kindle Loc. 4290-4335:
By the end of the 1970s, these small garden plots, which took up 4 per cent of the country’s agricultural land, were producing 40 per cent of its pork and poultry, 42 per cent of its fruit and over half its potatoes.

Brezhnev responded to the agricultural crisis by allowing larger garden plots to stimulate production. He might have improved the Soviet system’s chances of survival by doing what the Chinese were doing at this time: de-collectivizing agriculture and returning to an NEP-like system of cooperatives and household farms on contracts, with the state allowing them to sell what they produced beyond their quotas on the free market. Soviet reformers were not unsympathetic to these policy ideas, even if they stopped short of recommending them. Gorbachev, who at this time was in the Agricultural Department of the Secretariat, proposed giving more autonomy to enterprises and associations in deciding various production and financial questions in a memorandum to the Central Committee in May 1978 (an idea repeated by Andropov on becoming General Secretary in 1982). But the Brezhnev leadership would not accept these proposals—even as trial policies. The old guard was too committed to the Stalinist collective farm system which they had implemented as young men. The Party’s power was heavily invested in the direct management of the collective farms by thousands of officials in the localities. Perhaps, in any case, fifty years of collectivization (twice as long as in China) had destroyed any hope of bringing the Soviet peasantry back to life.

Relying on their tiny garden plots to feed themselves, the kolkhoz workers lived in squalid poverty. Many inhabited houses without running water or electricity. The ablest and most enterprising, mostly men of conscript age, ran away from the countryside, which became a ghetto of the old, the infirm and the alcoholic, who worked badly. Entire villages were abandoned or left to rot with only a few elderly inhabitants where once perhaps a hundred families had lived.

Alcohol consumption more than doubled in the Brezhnev years. People drank out of despair. By the early 1980s, the average kolkhoz family was spending one third of its household income on vodka—an official figure which does not include the moonshine made by kolkhoz workers in their homes (for every bottle bought from shops, they drank a bucket of moonshine). Alcoholism was the national disease. It had a major impact on crime rates (around 10 million people every year were detained by the police for drunkenness) and a bad effect on male life expectancy, which declined from 66 in 1964 to just 62 in 1980. The regime was unconcerned by the problem. It increased its vodka sales to extract money from the population which had little else to buy. Better to have people drunk than protesting against shortages.

Oil revenues rescued the regime from probable food riots and possible collapse. They gave a lease on life to the Soviet economy, which would have been in severe trouble without a five-fold increase in crude oil prices as a result of the 1973 crisis. The Soviet Union doubled oil production in the 1970s, mainly by developing new fields in Siberia. With its dollar earnings from the sale of oil and gas, the government was able to buy consumer goods and foodstuffs from the West. Before the revolution, Russia had been a major agricultural exporter. But within sixty years it had turned into the biggest food importer in the world. One third of all baked goods in the country were made from foreign cereals. Cattle production was totally dependent on imported grain.

High oil prices also allowed the Soviet Union to be more assertive in its foreign policy. They financed an eight-fold increase in military spending under Brezhnev’s rule. By 1982, the military budget consumed approximately 15 per cent of the country’s GNP. The rise showed the growing power of hardliners in the Brezhnev government, particularly in the KGB, the armed forces, and the defence and foreign ministries, who were committed at all costs to maintaining military superiority over NATO as the foundation of Soviet security.

Their confidence was boosted by the failure of NATO to respond to the Soviet invasion of Czechoslovakia to crush the reformist government of Alexander Dubcek in August 1968—an invasion that the Soviet Defence Minister, Andrei Grechko, had pledged to carry out ‘even if it leads to a third world war’. The Kremlin emerged from the crisis with renewed boldness. ‘The new correlation of forces is such that [the West] no longer dares to move against us,’ claimed Andrei Gromyko, the Foreign Minister.

Moscow justified its invasion and reinforced its grip on Eastern Europe by issuing the Brezhnev Doctrine, outlined in a speech by the Soviet leader to the Polish Communists in November 1968. When ‘forces hostile to socialism try to turn the development of a socialist country towards capitalism,’ Brezhnev warned the Poles, ‘it becomes not only a problem of the country concerned, but a common problem and concern of all socialist countries.’ In practice what this meant was that the Soviet Union reserved for itself the right to intervene in the internal affairs of any Warsaw Pact country if it deemed it necessary for its own security.

Revolutionary ambitions also fuelled the Kremlin’s military spending. While Brezhnev talked d├ętente with the Americans, the hardliners in his government were increasingly directing Soviet arms in support of Third World socialist revolutions and anti-colonial movements. The Americans approached d├ętente in the belief that the Soviet leadership was becoming more pragmatic and less ideological or revolutionary in its foreign policy—a rational approach allowing them to ‘manage’ and contain it through deterrents and rewards. A CIA report of 1969 maintained that the ‘USSR tends to behave more as a world power than as the center of the world revolution’. But this assumption soon proved wrong.

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