Catastrophe or Catharsis?:The Soviet Economy Today

Catastrophe or Catharsis? lays bare the reasons why the Soviet economic reform has plunged into crisis. In precise, vivid prose, Menshikov describes the exhaustion of the ‘command system’ in the pre-perestroika era. His book exposes the bureaucratic irresponsibility which, for example, allowed industrial ministries to strip enterprises of their re-investment funds, ensuring that the simple maintenance of production would in time become impossible.

Analysing Soviet economic policy during the perestroika years, Menshikov again paints a picture of adventurism and incompetence. We learn of ‘black holes’ in the state budget, and of how finance ministry officials concealed huge deficits by annexing the savings bank deposits of the population.

Menshikov’s analysis of the perestroika period is built around a powerfully argued thesis: the Soviet state bureaucracy, he sets out to show, has increasingly fused with the ‘shadow economy’ to form a new mechanism of fraud, theft and economic disruption.

Can total catastrophe be avoided, and can a process of purgation and recovery—that is catharsis—now ensue? Menshikov advances a detailed program for getting economic reform back on track while avoiding a further collapse of living standards. Here are specific proposals for curbing inflation, reducing budget deficits and ending the sway of the ‘shadow economy’. These tasks can still be accomplished, the author argues, without sacrificing the interests of the mass of the Soviet population.