Chapter 10

• Decline of the USSR and the end of the Cold War Ineffectiveness of Soviet command economy → Structural weaknesses and their effect on Soviet standards of living Weaknesses of the Soviet economy: ● Structural: ○ The Soviet economy became overwhelmed by the increasing demands as it grew and expanded by the 1970s. The Soviet government was not flexible enough to adapt to the many types of Industries and companies making different goods + acted too slowly → made poor decisions like being very slow to bring new technologies into its industries → Soviet industry was left behind as compared to US and Western Europe. ○ These weaknesses had significant consequences for the Soviet economy, with industrial output dropping from double-digit growth to a 3-4 percent decline by the late 1970s ● Workers: ○ Many Soviet workers also became disillusioned with the system → there was much corruption and not much incentives for working hard + fear that those who protested or complained would be arrested by the secret police → overall production capacity fell throughout the 1970s and 80s. ● Poor standard of living: ○ Soviet people knew that ordinary Americans had cars, telephones, televisions and other devices → BUT in the USSR such items were rare and impossible to afford due to the command economy prioritizing industry and military spending over consumer goods. ○ Workers wages were not increasing despite higher living standards in other non-communist countries in WE or US + Over investment in the military took money away from areas such as education, research, and development in universities (sectors that created money in the US) → USSR did not focus on raising standards of living or wages for its citizens. ● External economic burdens of the USSR

○ The USSR fought proxy wars and supported its allies with money → technical equipment, advisors, food and medical supplies → financial burden that increased greatly when war in Afghanistan broke out in 1979. ○ Soviet troops entered Afghanistan to maintain power of pro-soviet government there but were tied down for the next 10 years by Afghan Fighters Increased military spending ● The USSR invested too much in its military power (especially the nuclear weapons program and the war in Afghanistan) → estimated 30 to 50% of Soviet resources went to the military. ● Increased resistance within the comm