Background
Perestroika, which means “restructuring” in Russian, refers to a series of political and economic reforms initiated in the Soviet Union in the late 1980s. These reforms were aimed at transforming the Soviet economy and were promoted by Mikhail Gorbachev, who became General Secretary of the Communist Party of the Soviet Union in 1985.
Historical Context
Perestroika was launched in 1987 by Gorbachev and is regarded as one of two major reforms of his tenure, the other being “Glasnost” (openness). The economic overhaul targeted the relaxation of the stringent centralized control mechanisms that governed production and distribution, allowing for more private ownership and market-driven forces to play a role in the economy.
Definitions and Concepts
Perestroika: A system of economic reforms aimed at restructuring the Soviet economy. It involved relaxing centralized planning and legalizing private ownership of enterprises to seek increased efficiency and innovation.
Major Analytical Frameworks
Classical Economics
Classical economic theories, which emphasize free markets and the invisible hand of supply and demand, can be seen as somewhat contrary to the centralized control endemic to the Soviet system—making Perestroika a move towards more classical principles.
Neoclassical Economics
Neoclassical economics, which focuses on market efficiency and individual decision-making, might shed light on the motivations behind Perestroika’s reforms in promoting competition and productivity.
Keynesian Economics
Keynesian economics’ emphasis on government intervention for stabilizing economic cycles might contrast with Perestroika’s deregulation and movement away from a centrally planned economy.
Marxian Economics
Marxist theory, which formed the foundation of the Soviet economic system, was challenged by Perestroika as it pushed for market-oriented reforms within a fundamentally controlled economy.
Institutional Economics
This framework can explain the institutional changes undertaken during Perestroika to address inefficiencies within the Soviet administrative and economic structures.
Behavioral Economics
Behavioral economics might provide insights into how individual actors within the economy responded to and were expected to valorize from the new economic freedoms granted by Perestroika.
Post-Keynesian Economics
Post-Keynesian perspectives might analyze Perestroika’s impact on aggregate demand and how it influenced the broader macreconomy which had been long under rigid central controls.
Austrian Economics
Austrian economics focuses on the dangers of central planning, and thus might provide a critical yet supportive view of Perestroika as a corrective movement.
Development Economics
The development of transitional economies could be examined under Perestroika’s reforms, specifically looking at the integration of market-based practices in a post-socialist context.
Monetarism
Monetarism’s focus on controlling the supply of money might consider the fiscal and monetary policies implemented under Perestroika which aimed, in part, at stabilizing the Soviet economy during reforms.
Comparative Analysis
A comparative analysis of Perestroika could be conducted against China’s market reforms or other economic transitions, highlighting both successes and failures within the different contexts of socialist reformation.
Case Studies
Detailed case studies include:
- Enterprise reforms: Case studies of specific enterprises that transitioned from state-run to privately owned.
- Agricultural changes: Examining the collective farming paradigm shift.
- International impact: The impact of Perestroika on Soviet relationships with Western economies.
Suggested Books for Further Studies
- “Perestroika: New Thinking for Our Country and the World” by Mikhail Gorbachev
- “Revolution in the USSR and its National Consequences” by Andrei Shleifer
Related Terms with Definitions
- Glasnost: A policy of political openness initiated by Gorbachev in tandem with Perestroika.
- Central Planning: The system of economic organization in which decisions are made by a central authority.
- Privatization: The transfer of a business, industry, or service from public to private ownership and control.
