dorlomin wrote:http://peakoil.com/forums/independent-presidential-candidate-t64660-15.html#p1113121
The meme that Reagan defeated the Soviets is a popular one. It goes along the lines that he outspent the Soviets and drove them to destruction.
I have a very different take on things.
Through the 1960s and the 1970s there was near unanimity among Western economists that the rate of growth in Soviet-style economies was not only positive but higher than in Western Europe or the United States. Clearly, a positive rate of growth, over a period of 40 years or so, should produce wealth, but it didn't. The mistake that was made, and pointed out by a few economists such as G. Warren Nutter, was to measure capital investment, the amount of inputs, not wealth creation. That was a big mistake. It led to what the Hungarian philosopher Michael Polanyi, a great critic of communism, called "conspicuous production"-production for the sake of production. Steel was produced to make a factory to make more steel to make more factories, but the whole process never produced any real consumer goods. It did not translate into an increase in the standard of living. And, indeed, it was often politically motivated.
Instead of growing, the capital stock of socialist countries has been declining. They've been consuming it. Most of the textile mills in eastern Czechoslovakia were built before the First World War. They still operate with the original machinery. In East Germany, many of the buildings seem not to have been painted since 1945. In some cases, no one even painted over the old and faded Nazi slogans on the walls. In the Soviet Union, there are chemical factories built 110 years ago that are still producing the same chemicals in the same way. It is a general principle that under socialism no factory is ever closed.
Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940sRelying on standard measures of macroeconomic performance, historians and economists believe that “war prosperity” prevailed in the United States during World War II. This belief is ill-founded, because it does not recognize that the United States had a command economy during the war. From 1942 to 1946 some macroeconomic performance measures are statistically inaccurate; others are conceptually inappropriate. A better grounded interpretation is that during the war the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war genuine prosperity returned for the first time since 1929.
In fact, conditions were much worse than the data suggest for consumers during the war. Even if the price index corrections considered above are sufficient, which is doubtful, one must recognize that consumers had to contend with other extraordinary welfare-diminishing changes during the war. To get the available goods, millions of people had to move, many of them long distances, to centers of war production. After bearing substantial costs of relocation, the migrants often found themselves crowded into poorer housing. Because of the disincentives created by rent controls, the housing got worse each year, as landlords reduced or eliminated maintenance and repairs. Transportation, even commuting to work, became difficult for many workers. No new cars were being produced; used cars were hard to come by because of rationing and were sold on the black market at elevated prices; gasoline and tires were rationed; public transportation was crowded and inconvenient for many, as well as frequently pre-empted by the military authorities. Shoppers bore substantial costs of searching for sellers willing to sell goods, including rationed goods, at controlled prices; they spent much valuable time arranging (illegal) trades of ration coupons or standing in queues. The government exhorted the public to “use it up, wear it out, make it do, or do without.” In thousands of ways, consumers lost their freedom of choice.
People were also working harder, longer, more inconveniently, and at greater physical risk in order to get the available goods. The ratio of civilian employment to population (aged 14 and over) increased from 47.6 percent in 1940 to 57.9 percent in 1944, as many teenagers left school, women left their homes, and older people left retirement to work. The average work week in manufacturing, where most of the new jobs were, increased from 38.1 hours in 1940 to 45.2 hours in 1944; and the average work week increased in most other industries, too — in bituminous coal mining, it increased by more than 50 percent. Night shifts occupied a much larger proportion of the work force. The rate of disabling injuries per hour worked in manufacturing rose by more than 30 percent between 1940 and its wartime peak in 1943.
None of the standard macroeconomic theories employed to account for the wartime experience provides an acceptable explanation. The models cannot do the job because they do not pertain to a command economy, and the United States between 1942 and 1945 had a command economy.
In sum, the economy during the war was the exact opposite of a free market system. Every part of it was either directly controlled by the authorities or subject to drastic distortion by virtue of its relations with suppliers and customers who were tightly controlled. To suppose that the economy allocated resources in response to prices set by the unhampered interplay of demands and supplies in the markets for commodities, factor services, and loanable funds is to suppose a complete fiction. Clearly, the assumptions that undergird standard macro models do not correspond with the empirical reality of the wartime economy.
Meanwhile, as shown above, real personal consumption declined. So did real private investment. From 1941 to 1943 real gross private domestic investment plunged by 64 percent; during the four years of the war it never rose above 55 percent of its 1941 level; only in 1946 did it reach a new high. Notwithstanding the initial availability of much unemployed labor and capital, the mobilization became a classic case of guns displacing both butter and churns.
When the controls began to come off and the war ended more quickly than anticipated in 1945, consumers and producers launched eagerly into carrying out plans based on rosy forecasts and, by so doing, made their expectations a reality. Probably the most solid evidence of expectations comes from the stock markets, where thousands of transactors risk their own wealth on the basis of their beliefs about future economic conditions. (See Table 5.) Evidently investors took a dim view of the prospect of a war economy. After 1939, stock values dropped steadily and substantially; U.S. entry into the war in December 1941 did not arrest the decline. By 1942 the Standard & Poor’s index had fallen by 28 percent, and the market value of all stocks on registered exchanges had plunged by 62 percent in nominal terms. (Adjustments for price level changes would make the declines even greater.) The declines occurred even though current corporate profits were rising steadily and substantially. In 1943, as the tide of war turned in favor of the Allies, the stock market rallied and small additional advances took place in 1944. Still, in 1944, with the war economy operating at its peak, the stock market’s real value had yet to recover to its 1939 level.
By early 1945, almost everyone expected the war to end soon. The prospect of a peacetime economy electrified investors. Stock prices surged in 1945 and again in 1946. In just two years the Standard & Poor’s index increased by 37 percent and the value of all shares on registered exchanges by 92 percent, despite a decline of current-dollar after-tax corporate profits from their peak in 1944. Did people expect the end of “wartime prosperity” to be economically deleterious? Obviously not.
radon wrote:Another important factor was the people in general (not only alcoholics) got fed up with the idiotic restrictions in place, both economic and political, and with the consequences of these restrictions.
Sixstrings wrote: Putin's Russia looks fascist to me. Gorbachev's USSR seemed cautious, responsible in comparison.
Sixstrings wrote:Probably not fair to knock the Russians for behind technologically behind, let's not forget they've always had a smart class of physicists, scientists, engineers. In the space race, we had the former Nazi rocket team helping us out whereas the Russians were more on their own. Soviets put the first satellite in space, and the first man in space.
Plantagenet wrote:No. Actually, the Russians relied far more heavily on Nazi rocket science then the US did.
Konstantin Eduardovich Tsiolkovsky[1] (17 September [O.S. 5 September] 1857 – 19 September 1935) was an Imperial Russian and Soviet rocket scientist and pioneer of the astronautic theory. Along with his followers the German Hermann Oberth and the American Robert H. Goddard, he is considered to be one of the founding fathers of rocketry and astronautics.[2] His works later inspired leading Soviet rocket engineers such as Sergey Korolyov and Valentin Glushko and contributed to the success of the Soviet space program.
...
His most important work, published in 1903, was The Exploration of Cosmic Space by Means of Reaction Devices (Russian: Исследование мировых пространств реактивными приборами).[10] Tsiolkovsky calculated, with the Tsiolkovsky equation,[11]:1 that the horizontal speed required for a minimal orbit around the Earth is 8,000 m/s (5 miles per second) and that this could be achieved by means of a multistage rocket fueled by liquid oxygen and liquid hydrogen.
In 1903 he published an article "Investigation of outer space rocket appliances", in which for the first time it was proved that a rocket could perform space flight. In this article, and its subsequent sequels (1911 and 1914), he developed some ideas of missiles and the use of liquid rocket engine.
Result of the first publication was not the one expected by Tsiolkovsky. No foreign scientists appreciated the research, which today is a major science. He was simply ahead of his time.
http://en.wikipedia.org/wiki/Konstantin_Tsiolkovsky
A battery of Katyusha launchers fires at German forces during the Battle of Stalingrad. October 1942.
http://en.wikipedia.org/wiki/Katyusha_rocket_launcher
Putin does not seem to be fond of any particular ideology. He is mostly a practician. He simply re-instituted the traditional ages old Russian power structure that the pundits now call "the vertical of power". This power structure has proved to be very effective over the ages, its effectiveness being evidenced by the size of the Russian territory, for one. But it also has major nasty by-side effects, like bureaucracy, bribery etc. As an example: the chemotherapy also has ugly by-side effects like hair loss, but it saves from cancer. The "vertical of power" is not ideal but it has been tried and tested over the ages, and being short on time and resources, Putin picked it up and went for it: as a Russian saying goes - "A better way is the enemy of the good way".Sixstrings wrote: Putin's Russia looks fascist to me.
Gorbachev's activities led to a disastrous collapse in the living standards for the ordinary Russians, so he does not enjoy much adoration in his home country.Gorbachev's USSR seemed cautious, responsible in comparison.
Sixstrings wrote:Regarding Reagan.. I read somewhere that Reagan coordinated something with the Saudis to get oil prices very low which helped bankrupt the USSR. So it was a two-prong attack, their oil revenue was debased and they were being outspent on military tech.
ralfy wrote:If we follow McNamara and also consider rising debt and the 2008 crash, peak oil, the rise of BRIC and emerging markets, demand destruction in OECD countries, the "war on terror," the manner by which foreign policies and military aggression by various military powers led to more problems, the rise of more nuclear powers, etc., then it's likely "neither" and the Cold War did not end at all.
Wootan wrote:Sixstrings wrote:Regarding Reagan.. I read somewhere that Reagan coordinated something with the Saudis to get oil prices very low which helped bankrupt the USSR. So it was a two-prong attack, their oil revenue was debased and they were being outspent on military tech.
Yes, it was a two-prong attack on the SU, a genius move by the Reaganites. But being outspent on military hardware did not push them into collapse. That would have had effects only in the case of a full-blown war. (They had this small unwinnable war in Afghanistan, it was expensive.)
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