The Legacy Of A Free Market Economy Essay

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Perestroika When Gorbachev made an attempt at economic reform, introduced in 1987 as Perestroika, it was not enough to revive the economy and reverse the period of stagnation and excessive military spending that was crippling the economy. If anything, it made it worse. Perestroika introduced a free market economy, essentially the basics of capitalism, and aimed to improve life for Soviet citizens and working conditions. In theory, the reward of working was meant to stimulate the people to work even harder, which in the end would aid the Soviet economy and revive it. This was far from what happened. The new economic system did not have enough free market elements, causing for the failure of businesses and supply shortages as there were still price controls in place. As profits were limited, production fell, just like in the oil crisis mentioned prior. What Gorbachev devised aimed to keep basis of the Soviet economic structure, but modernize it with aspects of a free market economy, yet it was not enough of a change to revamp the economy. The true ramifications of Perestroika were seen in the USSR’s last few years; inflation was through the roof, the GDP had declined and was continued to fall at an alarming rate, there were shortages of food and clothes, and overall living conditions had greatly declined. While it shortages of goods were not uncommon to the Soviet public, Gorbachev’s policy brought on shortages of basic goods and necessities. He aimed at fixing the economy,
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