Popular in Economy of Eastern Europe
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This 10 page Class Notes was uploaded by Andrew Bashor on Monday February 1, 2016. The Class Notes belongs to POL/ECN/HIS 370 at a university taught by Dr. Pellillo in Spring 2016. Since its upload, it has received 12 views.
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Date Created: 02/01/16
Econ 370- Intro to Course 01/19/2016 ▯ Introductions- Basic stuf ▯ What is Eastern Europe? Can be defined by a small group of countries Geographic region and former Soviet Union Can extend into the Caspian Sea region ▯ Economic Transformation The breakup on USSR in 1990 A large number of diferent trends after 1990 o Georgia’s GDP fell 73% in four years o Poland jumped after breakup (236% of 1990 value) o Ukraine and Georgia still not back to former Soviet glory Some economic numbers are not legitimate due to poor reporting Rise and fall of Communism most important economic event of 20 th century ▯ Defining Eastern Europe “Time to Scrap ‘Eastern Europe’” video o connotations of poverty and poor economy o Geographically and politically doesn’t make sense. Some countries are members of NATO, others are part of the EU and shouldn’t be put into idea of Eastern Europe o Various regions that can be more well defined by money, policy, and geography Eastern Europe generally known as Baltic States and former Soviet States Former Soviet Union o 15 currently independent nations including Ukraine, Georgia, and Uzbekistan Former Yugoslavia o 7 nations including Kosovo, Macedonia, and Serbia Regions defined as Eastern Europe includes some nations that do not exist anymore ▯ In Essence, look at various countries individually as part of broader idea ▯ Syllabus handed out. Available on Canvas Maps, countries, capitals, and dates available on canvas ▯ Course layout and descriptions of assignments Each individual to become specialist on one country (collective learning) Monthly briefs on economic and political developments (4-6 sentences) o Sources to be in-text links (imbedded links) to news sources o Shared on canvas with rest of class o Andrew Bashor- Belarus o Google Alerts for news and information o RSS aggregator called feedly (feedly.com) Book chapter reviews…great ▯ ▯ Announcements One amendment to the syllabus – country briefs submitted no later than five days after the end of the month Date for geography quiz is announced Thursday ▯ ▯ Pre Bolshevik Most people working in agriculture before Bolshevik revolution Some traces of industrialization The symbol of sycle and hammer represents the workers of both industry and agriculture ▯ ▯ Bolsheviks Vladimir Lenin o Applied writings by Fredrich Engles and Karl Marx Economists during the mid 1800s Focused on large industrial nations: Germany, Britain Worried about the working classes becoming less and less wealthy because of the bourgiouse becoming exploitative Collaborated to write Communist Manifesto in 1848, Das Capital came later Guessed that the proletariat would overthrow capitalist class, a revolution o Very intelligent and learned o Staying in Switzerland before revolution after being kicked out of Russia o Head of Bolshevik party, instituted workers class rules o Looking to “catch up” with rest of the world in first economic treatise The Reds o Supporters of the Bolshevik party (Reds vs. Whites) o Fighting civil war throughout the Russian Empire from 1917- 1921 ▯ ▯ USSR Comprised of 15 now independent nations Lenin pushed for expansion of agriculture to scale up production Wanted to nationalize banking and major parts of economy Wanted to produce consumer cooperatives/ syndicate for allocation of resources First attempt to implement Marx and Engles ideas immediately o Marx and Engles thought it would happen over time ▯ ▯ Implementation Peasants were given use rights Soviets were looking over allocation of land and use of production o Done at local level, not done nationally o A lot of violence during time period because of wealth gap Banned hiring of labor in agriculture Supreme Council of National Economy o Complete nationalization of agriculture and national economy o Established cooperatives and made associations with local economies o Wrote declaration of exploited peoples o Banned free trade in most products, moved toward command economy State sponsored terrorism to take surpluses from the rich Winter of 1920 was brutal o grain was aggressively taken from peasants o Hyperinflation o Peasant agitation o Made implementation difficult and incredibly aggressive ▯ ▯ War Communism Prodrazverstka – seizure of peasant agricultural surpluses o Eventually replaced with regular tax. Tax worked better Banning of private trade o Not efective o Black / “gray” market economic activity Ban on private manufacturing o Nationalization of industry o Allocation of output by the state during the civil war Complete ban on use of money o “Free” rations for workers terror, expropriations, and requisitions in an attempt to implement the previously mentioned four characteristics Post War Communism – post 1921 got rid of Prodrazverstka slowly and replaced it with tax calmed down on state sponsored terrorism private trade allowed o 1922-1923 75% of retail trade in private sector o back and forth regulations on how much one could sell o Stalin saw private farmers as a threat maintained high centralization o state enforced low grain prices o peasants began to move into cities, state was fine with this o wanted to force peasants into cities to increase industrialization money was eventually reintroduced with economy some industrial producers did become privatized o see an increase in production and agriculture banks still nationalized ▯ ▯ Agriculture sector post 1921 State established cooperatives in order to keep the farmers from gaining wealth Moved toward more mechanization on larger farms Wanted collective farms (1927) and state farms (1928) Wanted to stamp out private actors (kulak) in agriculture (1929) 1931- a more aggressive push toward agricultural industrialization Reasons for collectivize o To promote industrial development Poor farmers leave for cities, get city jobs Land gets freed up and is owned then by state o Industrial and Agricultural prices Industry prices up, agricultural prices down Peasants squeezed, move away from peasant farms o Political atmosphere Prejudices against capitalist ideas Stalin’s “Great leap forward” way of thinking Those who did not join collective were enemies of the state State deported kulaks and seized assets for that of the state o By 1936, 89.6% of peasant households collectivized o By 1935, 94.1% of crop area was collectivized ▯ ▯ Transparency international released corruption index yesterday, best is Finland, worst is Turkmenistan former Soviet nations all find themselves low on chart ▯ ▯ Agricultural collectivization and industrialization Aggressive drive later on o Stalin, First General Secretary, very aggressive Georgian Involved in riots in early 1900s in Georgia Ended up in Siberian prison before the Bolsheviks Met up with Lenin just before the revolution after release from prison o Pushed for aggressive and rapid industrialization and collectivization toward late 1920s o Kulaks pushed out of property and land seized/cooperated People began to steal from farms out of necessity o Punishment included 10 years of prison + loss of all property After large collectivization, output plummeted o Famine starting in 1932 40% of Kazack population died, worse in Ukraine about 7 mil deaths in Kazachstan and Ukraine ‘31-‘33 a preventable happening caused by political ideology o Production all over economy collapsed By 1930s, began planning for entire economy, not just agriculture ▯ ▯ Central planning, economic structures Basic economic decisions and questions o 1. What products will be produced? o 2. How do we produce? What is best way to produce? o 3. How do we distribute goods and services? o 4. With whom do we trade? (locally and internationally) o 5. Monetary and fiscal policy value of goods and services how do we invest? Actions taken (basic rundown) in USSR o Emphasis put on industrial output and production o Looked to establish a planned economy o Distribution was done by rationing and centralized price setting by state Looked to make economy where everyone had access to same goods and services and same income o Investing decisions taken by political parties (the communist party) ▯ ▯ Types of Economic structures and comparison Capitalism o Decision making - Primarily decentralized, o Mechanisms for information provision and coordination - Market based economy, supply and demand o Property rights - primarily private ownership o Incentive system – market (material), right to own property o Organization of public choices and preferences – typically seen in democracies Planned Socialism o Decision making – primarily centralized State officials make decisions, others carry it out o Mechanisms for information provision and coordination – primarily plan Owners in a certain industry receive targets from officials according to plan Owners get plan based on state decisions, no private control o Property rights – primarily state ownership Private property rights stripped Means of production dictated by the state Own labor kept private o Incentive system – material and moral Bonuses for meeting goals in plan Sometimes paraded as examples if did very well and “played system right” o Org. for public choices – dictatorship All production decisions made at top Centralized from the state, highly authoritarian Market Socialism (mix of two previous) o Decision-making – primarily decentralized o MIPC – primarily market o Property rights – state and/or collective cooperation o Incentive – material and moral o OPC – state-dependent Slightly more democratic, but largely authoritarian Degree to which it was authoritarian varied by the nation and economy ▯ ▯ In practice in USSR The government would set up the plan, try to send it down to the enterprises o 1000s and 1000s of people involved Not very straightforward in practice The enterprises would almost always bargain for a diferent price Large amount of grey-market economic transactions o Government forced to reform plan time and time again ▯
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