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Revealing how the Soviet economy was dragged down, the unknown behind the scenes.

Updated: Jun 5

Looking back at history, the collapse of the Soviet economy had several main reasons:

1. Collapse of the Soviet Economy Itself, Unrelated to External Factors: The economic problems of the Soviet Union primarily stemmed from internal rigidity and backwardness.


Stalin's economic system was repeatedly proven to be a failure in theory and practice.


While the planned economy initially achieved some success, its drawbacks gradually became apparent over time.

Inefficient resource allocation, rampant bureaucracy, and a lack of stimulus from market competition led to economic stagnation and decline.


As Mencius said: "The destruction of a state begins with its own decay."


The collapse of the Soviet Union was more a result of self-destruction than a direct strike from external forces.

2. Strategic Errors in the Afghan War: Despite the United States' strong economic power, the Vietnam War still left it exhausted.


The Soviet Union made similar mistakes in the Afghan War.


This decade-long conflict consumed vast economic and human resources.

The Soviet leadership underestimated the complexity and duration of the war, mistakenly believing they could easily win.


Instead of achieving the expected political and military goals, the war became a catalyst for the collapse of the Soviet economy.


The increasing costs of the war exacerbated the burden on the Soviet finances, making the already fragile economic system even more unsustainable.

3. Impact of the Sino-Vietnamese War: The decade-long Sino-Vietnamese conflict was also one of the significant factors that dragged down the Soviet economy.


During this period, the Soviet Union continued to provide substantial military and economic assistance to Vietnam, further burdening its economy.


The Soviet leadership was overly confident, underestimating the duration of the Sino-Vietnamese War and its drag on the Soviet economy.


In contrast, the United States relatively maintained steady economic development during this period. The Soviet Union's multi-front warfare and unrestrained aid policies ultimately made it economically untenable.

4. Monolithic Economic Structure and Slow Technological Progress: The Soviet economy relied too much on the export of natural resources, especially oil and gas. This monolithic economic structure lacked resilience to cope with fluctuations in the global market.


Furthermore, the Soviet Union lagged noticeably behind Western countries in technological innovation and progress.


Despite some achievements in certain fields, its overall technological level was significantly inferior to that of the United States.


The lack of innovation put the Soviet Union at a disadvantage in global economic competition.


5. Difference between Talent and Industry: After World War II, the Soviet Union brought industrial equipment from Europe back to its homeland, enjoying thirty years of war dividends. However, this industrial resource obtained through plunder could not sustain continuous economic development.

In contrast, the United States, far from the war, had superior welfare and environment, attracting the world's top talents.


While the relocation of industrial equipment brought temporary strength, sustained innovation came from the continuous emergence of talent.


After World War II, the United States attracted a large number of scientists, engineers, and various high-end talents, providing a continuous source of power for its technological progress and economic development.


The gathering of talent and the improvement of innovation capabilities are important factors for the sustained prosperity of the American economy.


6. Failure of Diplomatic Policy and Deterioration of the International Environment: During the Cold War, the Soviet Union pursued a highly confrontational diplomatic policy, leading to tensions with the United States and its allies.

The Soviet Union sought to expand its influence by supporting communist movements worldwide, consuming significant economic resources and worsening the international environment.


The comprehensive confrontation between the Soviet Union and Western countries severely restricted its international trade and technological exchanges, further exacerbating economic difficulties.


7. Failure of Domestic Reforms: In the later period, the Soviet Union attempted economic reforms, but due to systemic and methodological issues, the reforms were ineffective.


Gorbachev's "New Thinking" policy and "Economic Acceleration" plan, although attempting to save the economy through reform, exacerbated economic chaos and social instability due to the lack of systematic and coordinated reform measures.


The unsuccessful reforms further weakened the vitality of the Soviet economy.

In summary, the collapse of the Soviet economy was the result of various factors working together.


Internal rigidity and backwardness, flawed military strategies, monolithic economic structure, slow technological progress, diplomatic policy failures, and ineffective domestic reforms all accelerated the decline of the Soviet Union to varying degrees.


The collapse of the Soviet Union was not only the result of its own problems but also reflected the complexity of the international environment and the power play among major nations at that time.

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