Question by Tom: Has a Communist country like Russia ever had an economic recession?
I know they have, so why couldn’t the Russian government just spend a few Trillion more and everything would turn into a paradise?
In Russia the government actually controls the economy and yet the government can not prevent a recession – wouldn’t increased government spending by the Russian government fix this?
Answers and Views:
Answer by Realist
the Ussr had no capital from taxes since the government ran all business.
Read all the answers in the comments.
What do you think?
bb says
I think that Ak-47 was soviet union invention. Many inventions happen in goverment funded or government based firms (Pentagon, Universities etc. ).
Private firms sometimes don't have the incentive to create some new big innovation because of a to big risk to fail or because there is a lack of funds.
Recession happens when there is not enough money circulating. If goverment controls the whole economy and most of the money there shouldn't be a problem .. becuse it can assure that there is always money circulating.
Sasha says
Is that person serious about nothing being invented in communist Russia? What an idiot.
So I suppose the Kinescope and the Iconoscope that were required for a television to work invented themselves out in the open ocean somewhere by God. To my knowledge, most Americans watch TV to some degree. How about the pressure suit? Good luck with our progress in the plane department if a Russian communist hadn't invented the suit that keeps you alive at high altitudes. How about the coating that goes over every single lens in production that keeps light from reflecting away from it, to exponentially increase the efficiency of both things as small as eyeglasses or camera lenses to whole observatory telescopes? Try communist Russia in early WWII. Oh, and somehow somebody forgot the AK-47, one of the most widely recognized and widely used guns in the world since just after WWII.
There's plenty of incentive in communism. Unfortunately, neither communism nor capitalism are the answers to economic stability. Both are far too extreme.
Thomas says
October 1917 the Bolsheviks seize power and begin tearing down the old system and by 1921 the entire land is in famine. The entire world laughs at the early efforts of communism believing it doomed from the start and it stayed desperately poor and non-functional for many years as the depression raged in the US. About the only friend the Bolsheviks had in the world was the American industrialist Armand Hammer. His exact motivations are not understood and probably never will be. What is clear is that he provided the fledgling government a lifeline when one was desperately needed.
He brought them surplus wheat to keep the population from starving and in return got concessions for factories which earned him millions although the question of salve labor has been bandied about and again is probably an unsolvable mystery.
Then in world war II only MASSIVE aid form the west kept the government both militarily and politically viable – even so the losses in the war were so huge that most of us in the west can hardly comprehend – over 23,000,000 deaths. That is over 13% of the population. The US by contrast suffered 418,500 deaths – or less than one third of one percent of the population.
It can be argued that the USSR did not begin to recover from WWII until well into the 1960's and the standard of living remained for all but the most privileged at least a couple generations behind their western counterparts. In truth as long as Communism survives – even in part, it continues to hold Russia back for real economic prosperity.
So has Russia had econimic recession? The first 6-8 decades I would say were a period of certainly sub optimal growth at best or really negative growth in some areas we you consider the amount of subsidies involved.
The history os Russia has demonstrated the inability of government to either spend their way out of a crisis or to even plan effectively for a crisis.
Jacob W says
You hit on an important point. Socialist systems do not generate wealth like Capitalist systems do. (see China today as opposed to ten years ago). So they do not have business cycles. No cycles no boom years no recessions. Basically, a Socialist system is in a permanent Depression. During the Great Depression in America, people stood in line for rationed food same as everyday in the Soviet Union.
Without the Capitalist motivation for profit and competition leading to ever improving production efficiency and competition, Socialism quickly stalls out and never changes. Why build a newer more efficient factory if you have to keep people employed anyway?
Since the Soviet Government could not generate any real wealth, their currency was nearly worthless elsewhere in the world so printing more of it had no effect but to make it even less valuable.
An important concept people need to get is that in a Socialist System you have no liberty. You are just one of many and completely expendable. The all powerful central government eats gourmet and the rest of us stand in line for hours for a loaf of bread.
In Capitalist America, you walk down the coffee aisle of any Supermarket and have your choice of many brands and kinds of coffee. In the Soviet Union any coffee was so hard to get people had to reuse the grounds three times.
You simply cannot do what the Democrats are doing. You cannot just print more money. Jimmy Carter tried that with horrible results. The government does not have any money because they produce nothing. What they spend they take from the only source of wealth in America, the private sector.
So, if you give some people $ 6,000 to help pay their mortgages you first have to take it from other people who also pay mortgages as well as renters who do not even own a home. Why should renters or homeowners help pay off someone elses mortgage?
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Daniel C says
Increased government spending actually increases a recession. What Obama is doing (dont' get me wrong, I support the man) is a big gamble.
don_dorkus says
Communism = no incentive
Name me one invention that came from the USSR that benefitted the world. The closest that I can think of one would be Sputnik – a beeping bowling ball.
shirtstom says
Yes they have because the USSR went bankrupt during the cold war.
just me says
They don't have recessions, only depressions.
ThaPH says
U should ask that 2 Obama
Fakename says
If we just increase my 50+% tax rate enough we will all be rich.