The Myths of the Programs for Transition to a Market in the USSR

Abstract

The Russian program for stabilizing the economy and for the transition to a market, or the 400 days program, was presented from the very outset (spring of 1990) as an alternative to the government program. Later, when the Supreme Soviet of the RSFSR learned of the program, now called the 500 days program, the president of Russia emphasized its significance as an alternative to the federal government's program. The members of the USSR Council of Ministers expressed their agreement with this assessment. The same opinion came to prevail in the mass media. After, when the Supreme Soviet of the USSR adopted the Primary Directions for Stabilization of the National and Transition to a Market Economy (October 19, 1990), the 500 days program was juxtaposed to the latter. The chairman of the Presidium of the Supreme Soviet of the RSFSR made very critical remarks about it at a meeting of this body, and in his speech to the Supreme Soviet of the USSR on November 16, 1990, it was stated that this was a program leading up a blind alley. All programs have two common elements: financial recovery within the framework of moving toward a market, and measures for the social protection of the population. Financial recovery has indeed become an absolute necessity. The chief mistake committed in the economic sphere after 1985 was the failure to appreciate the importance of strengthening the ruble. Instead of adopting basic steps to curb inflation, the government directed all of its efforts to stimulate it. The government measures were very close to economic ignorance: an attempt was made to increase the level of accumulation; the number of incomplete buildings increased to 305 thousand; the budget deficit