The Soviet Economic Slowdown: How Much Room for Maneuver?
This chapter examines the nature and causes of the Soviet economic slowdown; and considers whether it is merely a transitory phenomenon or a secular descent into stagnation. The high growth rates chalked up by the Soviet economy over the decades of the thirties, fifties, and sixties were a source of great pride to the Soviet leaders who spoke gloatingly of “catching up with and surpassing the most advanced capitalist countries”. High rates of investment of fixed capital, long the major stimulus to growth, are experiencing diminishing returns in resource extraction. Reserves of natural resources in the easily accessible regions of European Russia have become largely depleted, and Soviet extractive industries must dig deeper and go farther afield into very inhospitable environments. The Soviet manpower situation in the 1980s is profoundly affected by the impact of World War II on Soviet population growth and the demographic “squeeze” it imposes on labor supply.