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The needs and interests of the government rather than the interests of scholars still drive the research agenda, and the sociological establishment is riven by old rivalries. Moreover, most good sociologists have found themselves drawn into the political process Zaslavskaya is a member of the Congress of Peoples' Deputies and Mikk Titma is the ideological secretary of the Estonian Communist Party- and so they are lost to teaching and research. Swafford also expressed a more grave concern that expectations had become too great, that sociology could not possibly provide answers to Soviet problems; he feared a backlash when it "failed.

He argued that this, along with support for current exchanges, will be the greatest help to the Soviets in establishing standards for their discipline. Although U. He also strongly advocated a summer institute in which U. Acknowledging that the proposal was controversial, he also recommended supplying as many as personal computers and conducting methodological training as part of the summer institute. He did not claim that quantitative sociology held particular answers but does strongly believe that this training was an essential part of what the Soviets needed.

Finally, at home, he advocated more attention to training American sociologists as specialists in the Soviet Union, noting that two major universities had been unable to fill faculty vacancies.

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At present there are only a handful of such specialists. He added that, as the quality of Soviet data and research improve, American sociologists' own research will benefit, so that in the long run, helping the Soviets develop their discipline will serve our own interests as well. We also should try to strengthen the ability to do good research in the Soviet Union. We need to increase the number, now very small, of American social scientists who have, in addition to their substantive expertise, an understanding of the Soviet Union.

Because of the move to self-financing, some of the best Soviet social scientists are going into business to raise money. The reason is the lack of a scientific culture. Thus, the Soviet Union needs more than long-term graduate training, in which the culture of economics is learned. The Soviets should also be advised that even though they are in a rush to solve their domestic problems, they need to invest in their people, as the Japanese have done. Panelists agreed that the short-term emphasis on doing research for hard currency, which is the practice of some leading scientists while also using their institutes' facilities!

As a result, leading Soviet researchers find no time to train the next generation. Goble noted that changing culture is slow and can have unintended consequences: if more Soviets are trained in the United States, they may use the experience mainly to gain contacts for entrepreneurial research. In , the Central Economic-Mathematical Institute reported that it had no contacts with Gosplan; by , it was working jointly with Gosplan; and it now reports that it has developed an alternative plan for the Soviet economy.

One participant suggested that we should move from general lec- tures and symposia to joint research involving more junior people, including graduate students. Another commented that lectures, such as those that American sociologists recently delivered in Moscow, should be replaced by month-long training institutes. One suggested increasing Soviet contact with American schools of public policy. It was suggested that the Americans identify promising young Soviet scholars to be invited to come here.

In the new program of graduate training in sociology, only 31 of initial applicants were given the right to apply, and many of these were the children of important figures.

One participant noted problems with library exchanges, even though they have been going on for over 80 years. The old books are rotting, much is uncatalogued, and journal numbers are missing. There are inequalities: the Soviets need American library science techniques, and we would like access to their material and their great bibliographic apparatus. One is housing: it is difficult to involve the good young researchers from outside Moscow because of the housing problem in Moscow.

Another is the Soviet government agencies doing social science research that employ good researchers but do not yet have exchanges with the United States.

Lecture 2: From Soviet Communism to Russian Gangster Capitalism

The state statistical committee is also trying to make major changes. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website. Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

To search the entire text of this book, type in your search term here and press Enter. Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available. Do you enjoy reading reports from the Academies online for free? Sign up for email notifications and we'll let you know about new publications in your areas of interest when they're released. The state legalised abortion , and it made divorce progressively easier to obtain, whilst public cafeterias proliferated at the expense of private family kitchens.

Arts during the rule of Joseph Stalin were characterised by the rise and domination of the government-imposed style of Socialist realism , with all other trends being severely repressed, with rare exceptions. For many notable Mikhail Bulgakov 's works were not repressed, although the full text of his The Master and Margarita was published only in Andrei Platonov worked as a caretaker and wasn't allowed to publish.

The work of Anna Akhmatova was also condemned by the regime, although she notably refused the opportunity to escape to the West. During the time when the Party was trying to make Soviet regime more palatable to Ukrainians, a great deal of national self-determination and cultural development was tolerated. Texts of imprisoned authors were confiscated by the NKVD and some of them were published later. Books were removed from libraries and destroyed.

The Soviet Union: population trends and dilemmas.

In addition to literature, musical expression was also repressed during the Stalin era, and at times the music of many Soviet composers was banned altogether. Dmitri Shostakovich experienced a particularly long and complex relationship with Stalin , during which his music was denounced and prohibited twice, in and see Zhdanov decree. Sergei Prokofiev and Aram Khachaturian had similar cases. Although Igor Stravinsky did not live in the Soviet Union, his music was officially considered formalist and anti-Soviet.

In the s, s, and s, the Brezhnev era , a distinctive period of Soviet culture developed characterised by conformist public life and intense focus on personal life. In the late Soviet Union, Soviet popular culture was characterised by fascination with American popular culture as exemplified by the blue jeans craze.

In arts, the liberalisation of all aspects of life starting from the Khrushchev Thaw created a possibility for the evolution of various forms of non-formal, underground and dissident art; still repressed, but no longer under the immediate threat of Gulag labor camps [ citation needed ]. Greater experimentation in art forms became permissible in the s, with the result that more sophisticated and subtly critical work began to be produced. The regime loosened the strictures of socialist realism ; thus, for instance, many protagonists of the novels of author Iurii Trifonov concerned themselves with problems of daily life rather than with building socialism.

In music, although the state continued to frown on such Western phenomena as jazz and rock , it began to permit Western musical ensembles specialising in these genres to make limited appearances. But the native balladeer Vladimir Vysotsky , widely popular in the Soviet Union, was denied official recognition because of his iconoclastic lyrics.

From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. In this case, the pressure to pay for externalities would lead to diversification in cleaner productions under the condition that the residents are rich enough to value good ecology. After the discovery of Western Siberian oil and gas deposits, the authorities faced the issue of choosing a strategy for exploring the region, considering both its huge prospects and, at the same time, its remoteness and lack of development.


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Gas output was planned to grow fifteen-fold, from In fact, despite the intensive exploitation of Western Siberian oil deposits in the s, oil output by the USSR reached just Even during the record-breaking year of , oil output at million tons 44 was way below estimates. The fact that these plans were drafted when there was no information yet regarding the biggest oil deposits makes this even more surprising.

Possible explanations are the planned steep growth of industrial output of about 9. In this case, the annual oil production growth rate of 8. Broadly speaking, such industrial output growth rates are not completely unique, albeit they are very solid over the two decades. But two factors need to be considered. Secondly, as a country becomes richer, the share of industrial output in its GDP declines and gets substituted mostly by an increase in the share of services.

On the whole, assuming that the Soviet economy grew at the same rate as the Japanese economy, it would still hardly be able to export considerable amounts of oil in the s and s. This assumption is very important since if oil and gas production efficiency calculated as the percentage of material actually extracted from deposits approached Western standards, output would grow much faster. The United States is a good example. Between the beginning of the twentieth century and , the country was the world leader in oil production, but it was never mentioned as a nation that suffered from the resource curse.

In , the USSR consumed 7. In , the CIA prepared a set of reports that forecasted, in particular, a decline of oil output in the Soviet Union to million tons, which would have made the country a net importer of this resource. This is why the Soviet Union had to export less and less oil as its level of economic development approached that of developed nations, especially considering the distances and the climate. This thesis is backed up by theoretical studies. In the beginning of the s, when the giant Western Siberian oil and gas deposits had not been discovered yet, the authorities actively promoted the idea of building the Lower Ob Hydropower Plant in , Nikita Khrushchev talked about its construction as a resolved issue If this idea had been implemented, a large part of the oil and gas rich territory would have been flooded and apparently made impossible to use by the industrial oil and gas production at the existing level of technology.

The first scenario can be considered moderate. According to it, Western Siberian deposits were supposed to be actively explored in the short term. Active export of oil and gas to distant foreign nations was also not planned. According to the advocates of this scenario, its implementation did not have any serious risks. But this was based on the assumption that the Volga-Urals oil-and-gas-bearing region still had significant and relatively easy-to-extract oil deposits.

Indeed, its oil production in However, in , output was million tons; it fell to Moreover, in the mids, many experts working in Gosplan and the oil and gas industry did not expect that this could happen at all. The moderate way generally presumed that a bird in the hand is worth two in the bush. But, as often happens, its advocates did not know that it was even more risky than the exploration of Western Siberia. In the s, Gosplan considered the second option of active exploration of the Western Siberian oil-and-gas-bearing region to be a very risky one.

Nevertheless, the advocates of the second option included the ministers of the oil and gas industry and the geology minister, so this strategy won. Its supporters cited solid arguments. Firstly, thanks to the existence of huge deposits, existing resources could be focused entirely on exploration, without even touching other deposits. Secondly, the Tyumen deposits were relatively close to the European part of Russia and also near the extremely large Urals industrial region , much closer than the deposits around Baku and Grozny, in proximity to the state border.

Finally, the costs of exploring Western Siberia were supposed to be reduced by the broad use of a rotational system of work in which workers did not need permanent places of residence and all the necessary infrastructure. The desire to quickly explore this huge region and get maximum returns with minimal costs has led to the situation in which the issues of long-term infrastructure planning were not paid the attention they needed.

After , eleven of the biggest deposits were discovered, five of which had over 1 billion tons of initial in-place resources Samotlor had 6, million tons; Fyodorovskoye had 1, million tons; Mamontovkoye had 1, million tons; Lyantorskoye had 1, million tons; and Priobskoye had 1, million tons. The production in the Volga-Urals region, which started at the end of the s, compensated for the fall in output from the Baku area. In turn, Western Siberian production compensated for the decline in output from the Volga-Urals region and each time the authorities managed to make output more than it had been previously.

His successor, Feliks Arzhanov, was fired in for attempting to maintain the production plan at the level of million tons in , a total of It could be that the planned economic system, or, to be exact, the system of incentives it created, was largely to blame for the impossibility of a rapid increase in output. For instance, as the planned numbers were usually set in units of a physical quantity, the number of meters drilled was a reasonable indicator for geologists. It seemed that the larger this number was, the better geologists worked.

But geologists soon realized that the deeper they drilled, the harder it was to drill. Maybe this luck, and the huge geological exploration efforts, did more harm to the Soviet Union and Russia in the s. The appearance of huge new oil and gas deposits made it possible to postpone the transition to more efficient energy use further and further. In the case of oil and gas, resource rent is excess income on top of normal income received from investments with normal profitability.

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In other words, rent is revenue from selling a resource minus its production costs. Frankly speaking, this is not the most correct definition of rent. In a strict sense, resource rent is the sum of differences between the price and marginal costs of resources not necessarily natural. If a deposit has the economy of scale effect, then, as production increases, the rent from every additional item of a resource marginal rent first increases until the marginal cost stops diminishing and then starts to fall.

Mechanisms of extracting and distributing rent in the USSR were quite unusual and mostly hidden. The energy sector had been developing, first and foremost, in order to provide the military-industrial complex and heavy industry with resources and earn hard foreign currency to fund key import needs. The government represented by the State Committee on Prices, interacting with industry-specific ministries was setting domestic prices in the Soviet Union for extended periods of time.

They were heavily marked down compared to world prices. The turnover tax composed the principal part of this difference. In the mids, the ratio between the average wholesale price on crude oil and the retail price of octane petrol was about First, the revenue from selling a resource must be considered potential revenue that could have been received from selling the resource at a market price, rather than as actual revenue received from the sale.

In the same way, the cost of production is not the reported cost of production at any moment of time, but the cost that could have been established under the efficient organization of the industry, i. They suggested referring to this cost of production as natural production costs, and to the surplus as excess costs. In a similar way, if excess value of extraction appears during the extraction of raw materials, it is also included in the calculations of resource rent.

According to the authors, the omitted amount is an integral part of the rent, and its existence itself reflects decisions regarding the use of wealth. Then we can assume that there are taxes—formal and informal such as bribes for government officials and involuntary support of the social sector of the city or the region. Thus, profits after tax can be expressed in the formula:.

This is what is left for the owners of an enterprise. But the R variable is important for society. It can be expressed the following way:. All these categories need to be taken into account during the calculation of rent. For instance, the Soviet Union provided huge subsidies to both domestic and foreign Comecon nations energy consumers.

Production costs were routinely amplified for various reasons, such as the need to boost output above the optimal pace under the pressure of federal authorities, and the necessity of not using the best production resources available the oil and gas complex, albeit to a lesser extent, also experienced the scarcity of necessary resources. The second reason is that these categories are used to hide and redirect flows between stakeholders of the rent. The size of the share of each category of participants has important political-economic consequences.

Essentially, it largely determines the political economy of the society, which lives off resource rent. Unfortunately, there are several technical difficulties that considerably reduce the accuracy of calculating the total oil and gas rent both in Soviet and post-Soviet Russia. As we already mentioned, a correct estimation of total rent means that we have to consider the difference between the price and marginal costs. The figure of marginal cost is almost always unknown. The accuracy of an approximate estimation depends on how fast marginal costs were growing when the output was increased to the actual level.


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  8. If the share of output with rapidly growing marginal costs in the total production is large, the figures of marginal and average costs diverge quite considerably. Then, using average costs in calculating rent will significantly overstate its amount. Gaddy and Ickes consider that the first assumption about the slow substitution of low-cost deposits by high-cost ones is true. Another controversial issue is how to consider different types of fixed costs, first of all, capital expenditure.

    In other words, should the costs of pipelines, geological surveys, and so on, be considered? Under the formal definition of rent, there is no need to do this, as rent emerges when the actual prices exceed the minimal price, forcing a company to supply raw materials to the market. And in the short term, the company has no opportunity to avoid nonrecoverable capital investment that is, in the worst case, it is ready to downplay the prices until the loss exceeds the amount of amortization of these capital investments.

    Any situation better than the very worst one—the lack of money to pay for amortization—brings the rent. The authors define natural value as value corresponding to a competitive manufacturer who uses market interest rates and maximizes the expected discount cost of deposits. It is not clear how the authors drew the difference between actual and natural oil and gas costs. As can be understood from their argument, by natural costs they mean the best result the USSR could have achieved under a certain technological and organizational level of its energy sector. This leads to certain conclusions.

    First, oil and gas rent was fluctuating heavily.

    Analyzing the Problem

    Notably, the drop after the first peak was much longer and stronger than after the second one However, the analysis should be prolonged to the present time, as another downturn started in , the end of which is still unknown some researchers think oil prices will never fully recover due to the technological revolution both in cheaper alternative energy sources and in oil and gas production. Over the period between and , the average rent amounted to 33 percent of GDP and in the Soviet period. However, we should make two notes that make the calculated data different from reality.

    Firstly, we are dealing with potential rent, calculated on the basis of the difference between world prices and minimal possible costs. In particular, this means that a considerable part of rent went not to the country itself, but to the countries receiving oil and gas at subsidized prices. This also means that sales would plummet both domestically and abroad if the subsidies stopped, and this would lower the overall volume of rent. Thus, potential rent exaggerates the total amount of rent.

    Secondly, starting from the mids and until the early s , gas rent approximately equaled oil rent, and for many years after it was about twice as big as oil rent. On the whole, we can see that gas rent was a much more stable part of the total rent than oil rent. Considering the huge size of gas rent and its relative instability, this poses the question: if Russia suffers from oil and gas dependence, which factor is the main one behind this dependence—oil or gas? These resources are considerably different in the volume of required investment.

    Transportation of gas demands huge capital expenditure on constructing gas pipelines and compressor stations, but the marginal cost of its extraction and transportation are relatively low. Extraction and transportation of oil demands smaller capital investment but at a larger marginal cost. If gas deposits are located far from consumers, control over deposits makes little sense if there is no control over pipelines. In theory, the resource curse is strongly associated with concentrated resources, that is, those located within a limited area, which are, due to this reason, easier to control.

    The ease of control is associated with the temptation to acquire this control, which, given the weakness of government institutions, can lead to armed conflicts which has often happened in many African nations. Figure 5 illustrates both scenarios. In the second scenario of 2 percent annual growth of marginal production costs the rent does fall, but insignificantly. During low-price years, such as the end of the s, the rent was significantly below the baseline scenario.

    During high-price years, according to the authors, the difference was no more than 10 percent. Sagers, Valery Kryukov, and Vladimir Shmat see table 2. Considering that about 70 percent of the produced oil and 87 percent of gas were consumed domestically at well below world prices, the main share of oil and gas rent went to prop up the industries that were uncompetitive on the global scale. Given this, we have to remember that a large part of the industry was military. Despite the differences in methodology, the estimation of rent in the mids was approximately the same in both studies.

    According to their estimates, the extraction industries created all net profits of the economy What is important is the following:. Even the fluctuations of these two kinds of rent result in different incentives of economic agents inside the country. This happens because of the high uncertainty regarding the maintenance of this rent, and this is known to make economic agents discount future revenues and focus on the short-term horizon. Thus, speaking about the amount of resource rent, we should keep in mind a set of particular factors linked to its effect on the incentives of economic agents.

    But in our case, we speak about oil and gas rent, which reduces the array of possible characteristics linked to it although it could be very broad. But despite this, within its last ten years, it experienced grave problems caused by its fuel and energy complex. They were not linked to the shortages of oil and gas, but rather had to do with rapidly increasing costs of exploring, extracting, and transporting materials , huge inefficiency, repeated shocks, and other unpleasant surprises.

    The policy aimed at solving these problems was so high-cost and demanded so much attention that it became the main undermining factor of the situation with the Soviet industry after the mids and one of the main direct reasons behind the downturn and stagnation of the Soviet economy. Mikhail Gorbachev, the last Soviet leader, seemed to realize that the state energy policy was one of the main causes of economic problems.

    He claimed that the struggle to curb the economic downturn rates had led to excessive spending on the expansion of the fuel and energy complex and boosted supplies of new resources and their irrational use. At the same time, the hard currency received in return for resources was spent on current needs instead of the modernization of the economy. Gorbachev himself was unable to break the policy, which began under Brezhnev, of a rapid growth of investment in the fuel and energy complex and the inability to introduce energy-saving policy.

    The reaction of the Soviet Union and developed nations to the energy shocks of the s is indicative. In response to the rapid growth of the relative oil price, a technological boom started in the West that affected geological exploration and extraction of natural resources and the search for energy-efficient technologies and alternative energy sources.

    Culture of the Soviet Union

    The heavy dependence of energy-resource consumption on economic growth had disappeared due to the widespread use of energy preservation. Oil consumption was reduced both in absolute figures and as a share of the total energy balance. In the USSR, attempts to boost oil production and atomic energy were the principal response. Energy saving efforts mostly failed.

    The irony is that the most powerful stimulus for the Soviet energy-saving policy was not the growth of oil prices in the s, but their drop in the s. This sharply reduced the inflow of foreign currency and made the Soviet Union export more oil. In the West, a significant share was composed of private automobile and house owners, who reacted to the changes in energy costs much faster although industrial consumers also reacted much more swiftly.

    Unfortunately, the Soviet Union lost that opportunity. This is a paradox: when a country has the opportunity to make the necessary changes, there is no longer the desire to do so as in most raw-materials-exporting nations during resource booms and, on the contrary, when the opportunity to conduct changes is sharply reduced, the willingness to make changes caused by acute necessity sharply increases.

    This paradox is one of the symptoms of the resource curse, which lies in the drop of the quality of economic policy, when long-term goals become increasingly neglected for the sake of achieving short-term ones. This situation can be analyzed in the categories of the substitution effect and the income effect. As oil rapidly gets more expensive, even with the same real incomes, it gets more profitable for companies, households, and the government to substitute it with other energy sources the substitution effect. As real income in nations heavily dependent on oil imports goes down when oil is expensive, and the demand on oil incomes has a positive elasticity quite high, but less than one 80 , oil demand also falls due to the income effect.

    In the Soviet Union, the substitution effect was also supposed to work. But, as we already mentioned, the planned system was, firstly, unreactive in regard to making such decisions, and secondly, the viewpoint that domestic consumers are more important than foreign ones was still influential.