What has the death of the Soviet Union told us?

The collapse of the Soviet Union, which happened exactly 30 years ago, is regarded as one of the most astounding and puzzling political and economic phenomena in recent decades or even centuries. In the past 30 years, most of the explanations for the death of this superpower have been based on “any attempts to build a Utopia will fail” or “communism is practically infeasible”. In this post, I do not plan to repeat this explanation, because academia has made it rather clear, and even undergraduate students in politics can give a speech on this topic by quoting this philosophy. As I am not a professional economist, political scientist or historian that can give a systematic and insightful analysis of this “political earthquake”, here in this post I only talk about some of the phenomena appearing in other parts of the world before and during the death of the USSR. After reviewing and analysing the reactions of governments, experts, scholars and politicians at that time, we might be able to get a better understanding of similar cases in the world today.

Experts and intellectuals are usually unreliable

According to the remarks left by intellectuals and political scientists well known during the 1970s-1980s, we should find that most of these experts did believe the Soviet Union would surpass the US within one or two decades; and these experts believed that the economic size of the USSR and the level of technology would become the only superpower in the world by 1990, as their predictions indicated. Like China today, the Soviet Union in the 1970s and 80s was generally deemed the future ruler of this planet; and this superpower would have the most advanced technologies.

Now we have known the end of this story. Most of the experts on international relations and affairs lost their bet in 1991. The “new dominating power of new technology” did not appear on this planet. Instead, the world witnessed that the development of cutting-edge technology in the USSR got choked gradually after Reagan imposed sanctions on this country — Just like what has been happening in China since Trump started restricting western companies from selling some key technologies to their Chinese partners and clients. Many famous political scientists were shocked as they had never believed this red superpower was so weak in technology and economy.

The death of the Soviet Union was indeed an examination testing how accurate the experts’ predictions were, and whether the experts were capable of analysing the political and economic cases in the real world. Apparently, most of the renowned experts failed this exam. Personally, I reckon experts usually only have a high level of expertise in the narrow field they have dived into, and most of them do not have a perceptive comprehension of other fields. However, the condition of a massive country and its interactions with other powers usually involve many socioeconomic factors. If a researcher only concentrates on one or two factors about the country, he or she will be very likely to get false knowledge hence false predictions.

Since experts’ narrow concentration can lead them to wrong conclusions, then it will be easy to understand the following point:

Data and figures do not always talk

Similar to economists’ expecting China will surpass the US as the economic champion in 2030 (or maybe 2028) today, economists in the 1970s and 1980s also expected the USSR would smash the US in the late 1980s or early 1990s. And the method they used was to regress the data published by the Soviet government onto a linear function. Suppose making a prediction on a nation’s economic situation is simple like this, then even a 15-year-old schoolboy can work for a top-level think tank, as it is not more difficult than the mathematics taught in Year 8.

Predicting economic trends is more than analysing the figures because the condition of an economy and polity is a massive and complex network consisting of various economic activities. For instance, were the economic figures released by the Soviet Communist Party really reflecting the productive activities in this country? How was its GDP structured? What were the driving forces of the economy? etc. Many of these factors could not be reflected by figures, and the results calculated with classic mathematical tools in economics did not make sense either. For economies such as the USSR, China and even North Korea, the immeasurable conditions and phenomena might hint more than their official data.

According to economists in the early 1980s, the Soviet Union was enjoying a booming era as its annual growth was more optimistic than western countries including Japan. They would rather consider the USSR a more powerful economy than countries such as West Germany or the Netherlands because the estimated size of its GDP was far bigger than that of other western countries except for the US. This is still the logic used by economists to overestimate China’s power today. Back in the late 1970s and early 1980s, however, when the annual GDP growth of the USSR was over 3%, the ordinary people there had to queue for hours just to buy a piece of bread.

To most of the economists and political scientists at that time, the figure “3%” and the status “second largest GDP figure” attracted more than other facts. Because these experts had been trained to judge the situation on “numbers”. As for the fact that Russian people were struggling to get food in supermarkets, they were not aware of it or might be just too lazy to find out. However, economics is a subject researching human society, therefore, the behaviours of humans in a society, instead of hard and emotionless numbers, are the genuinely effective “index” to reflect the health of an economy.

The structure of the economic figures is commonly ignored by experts who are figure addicts. The annual GDP growth of the US in the 1980s was similar to that of the USSR, which was around 3%. To many economists then, it meant the USSR was equal to the US in terms of economic power. Nevertheless, the former achieved 3% growth by selling gas and oil and producing weapons according to the commands given by the communist party; while the latter achieved its growth by inventing and exporting electronic devices and computer-related technologies. The structural differences between the two economies indicated their differences in stability, sustainability and robustness. The economists only saw the number “3%” but kept blind about the structural differences, which is why they failed to foresee the death of the red superpower. Additionally, the economic data published by totalitarian regimes such as the Soviet government should be suspected, instead of being treated as solid economic information. For a totalitarian system, giving the people an impression (or illusion) of “the almighty nation is always growing faster than western countries” is the only method to sustain their legitimacy at home. Therefore, the official figures published by regimes that only tolerate a single and uniform voice in the nation are usually not convincing indices reflecting their domestic economic situation.