Gorbachev '84: Or, a surviving USSR?

[History Learner]

First, to set the stage for the discussion, we need to understand why the USSR collapsed. From Gorbachev vs. Deng: A Review of Chris Miller’s The Struggle to Save the Soviet Economy:

As oil prices fell, Gorbachev tried to maintain living standards which resulted in major growth in the budget deficit. Before Gorbachev came to power, the budget was balanced or even had a small surplus. In 1985, the deficit grew to 2% GDP, by 1990, it reached 10% GDP. In 1991, the last year of the Soviet Union, the deficit exceeded astronomical 30% GDP (p. 152).​

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The fiscal crisis was partly explained by a collapse in global oil prices but was partly handmade. First, Gorbachev’s anti-alcohol campaign reduced revenues from excise taxes. Second, in order to keep the industrial and agricultural lobbies happy, the government continued to subsidize their inputs and raise prices for their outputs. At the same time, in order to pacify the general public, consumer prices were kept low. Gorbachev also avoided cutting expenditure on public goods and tried to maintain living standards. He decided that–unlike Deng–he would not use force to suppress protesters and therefore tried to avoid the situation where people took to the street to voice their economic grievances.​

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To fund the deficit, the government resorted to borrowing. The foreign debt increased from 30% of GDP in 1985 to 80% of GDP in 1991 (p. 152). As the markets were growing increasingly reluctant to lend, the government funded the deficit by printing money. The official prices were still controlled, so the monetization of budget deficit resulted in “repressed inflation”, increased shortages and higher prices in black markets. Eventually the Soviet Union ran out of cash and collapsed. Miller’s account shows that both oil price shock and the impact of the anti-alcohol campaign were not the major drivers of the fiscal crisis. The main factors were lack of resolve in tackling the interest groups and in maintaining fiscal discipline as well as incompetence in basic economics.​

So with that out of the way, I think the easiest way to prevent the collapse of the USSR would be for Gorbachev to come to power in 1984, directly following Andropov and thus avoiding Chernenko's effectively lame duck term as General Secretary. Why? Gorbachev was a protégé of Andropov and was, as weird as it may seem to modern readers, initially considered a hardliner; it seems likely to me that a less prepared Gorbachev would seek to double down both on Andropov's successful Anti-Corruption campaign but also the latter's ties to the KGB in order to stabilize his rule. Instead of Glasnost and Perestroika, we would have several years of purges that would solidify the party around Gorbachev while also boosting the economy overall. With the party behind him, Gorby could make the economic reforms he needed while maintaining the discipline of the interest groups in the process without the need for the favors trading-based subsidy program of OTL.

 

[History Learner]

From the other place:

In 1989 the Soviet Union's GDP amounted to 2.5 Trillion US Dollars. GDP per Capita amounted to 8.700 US Dollars.​

In 2013 the countries of the former Soviet Union had a combined GDP of 2.75 Trillion US Dollars. GDP per Capita amounted to 9.503 US Dollars.​

Between 1980 and 1985 the USSR's annual average GDP growth amounted to 2.0%. The failure to embrace a model of intensive economic growth, high military spending, bad harvests, declining oil prices, and the war in Afghanistan can be blamed for the relatively low rate of growth during the early 1980s, as compared to the 1970s. It can be presumed that the rate of growth would've increased once again during the 1990s, following the inevitable end of the arms race, better harvests, higher oil prices and the eventual ending of the war in Afghanistan.​

However, for the sake of argument, let's say that the annual average GDP growth of 2.0% continues until 2013. Let's assume that the annual average population growth rates of the early 1980s remain stable as well (0.8%). The total population I'm 1985 amounted to 277.8 Million). By 2013, the Soviet Union's GDP would have increased by 56%, compared to 1985 (it amounted to 2.2 Trillion US Dollars during that year). If we stick with these estimates, the hypothetical GDP of the USSR in 2013 would have amounted to 3.4 Trillion US Dollars. The hypothetical population in 2013 would have amounted to 340.0 Million. The USSR's hypothetical GDP per Capita would have amounted to exactly 10.000 US Dollars (3.4 Trillion ÷ 340 Million = 10.000).​

To conclude:​

In 2013 in OTL, the total population of the FSU amounted to 289.37 Million. GDP per Capita amounted to 8.700 US Dollars.​

In 2013 (using this quite pessimistic model), the population of the USSR would have amounted to 340 Million. GDP per Capita would have amounted to 10.000 US Dollars.​

Therefore, IMO it can be concluded that living standards would've been significantly higher in such a scenario, especially if we consider a less pessimistic development than I used in the model above.​

I largely agree with this analysis, and think an optimistic scenario is on the order of 5% average growth rates from 1985 to 2020. Andropov's Anti-Corruption campaign IOTL boosted GDP growth by about 0.5% before floundering under the effectively lameduck Chernenko; here, Gorby would be taking over directly and would be a more able successor. My general thought process is Gorbachev would double down on the campaign and compromise on the Anti-Alcohol program to secure his rule, which would tend to make him more cautious going forward. He'd spend the rest of the 1980s consolidating his rule and tackling Price Reform, before then moving to his OTL economic reforms in the 1990s. By that time the Price Reform and recovery of global oil prices means the budget is running a surplus and his Anti-Corruption campaign would have him sufficiently placed to run the reforms without needing to do subsidies; should he still need to, the budget is, as stated, stable enough for that.

So, a modern day USSR with a GDP of $4.38 trillion and the 340 million population predicted above would probably stay about the same, given the stable fertility rates in the USSR prior to its collapse and avoiding the pitfall that was the 1990s and early 2000s.

 

[History Learner]

Been reading The Last Empire: The Final Days of the Soviet Union by Serhii Plokhy, so I thought I'd revisit this. One interesting tidbit I've mentioned elsewhere but never posted in this thread is that, by the 1980s, Russian language publications had overtaken Ukrainian ones in Ukraine quite decisively:

Plokhy's main point in his book is that the collapse of the USSR was a result of the failure of the power sharing agreement between Russia and Ukraine that had existed since Stalin. I disagree this was the main cause, but certainly it was an irritant and was very situational dependent. A more cautious Gorbachev is one less likely to make the mistakes that lead to the historical situation, which required A LOT to go wrong to reach the point it did and a sounder economic position will do wonders.

My general thought process is Gorbachev comes in directly after Andropov in 1984, compromises on the Anti-Alcohol campaign and keeps doing the Anti-Corruption measures of his predecessor before tackling Price Reform in 1986. This more than keeps the Soviet budget steady, and allows Moscow to bailout the Warsaw Pact members in 1988-1989; this is the carrot to the stick of Soviet intervention in Romania in 1989. With oil price recovery in the early 1990s and the Warsaw Pact stable, Gorbachev can then turn to doing Perestroika over the course of the 1990s.

 

[Plumber]

I agree with Plokhy that the USSR was the last European colonial empire to fall (Hong Kong and Macao aside) and that it's days were numbered. That graph shows just why Ukrainians were so eager to escape the Russification policies which began under Brezhnev and continued under Gorbachev. Khrushchev's legacy of informal power sharing between the Russian and Ukrainian SSRs were undone by Gorbachev, who was not seen as particularly attentive to Ukrainian demands. However if you avoid Chernobyl you can get it to stay in the Union longer.

 

[History Learner]

I agree with Plokhy that the USSR was the last European colonial empire to fall (Hong Kong and Macao aside) and that it's days were numbered. That graph shows just why Ukrainians were so eager to escape the Russification policies which began under Brezhnev and continued under Gorbachev. Khrushchev's legacy of informal power sharing between the Russian and Ukrainian SSRs were undone by Gorbachev, who was not seen as particularly attentive to Ukrainian demands. However if you avoid Chernobyl you can get it to stay in the Union longer.

That element of Plokhy's argument I'm extremely unconvinced by, given that even with Chernobyl and the collapse of the power sharing agreement, in 1991 the Ukraine SSR voted to stay in the USSR by an overwhelming majority at 71%. The Communist Party also continued to dominate at the legislative level, at around 3/4s control and were in favor of maintaining the Union until events in 1991 overtook them. In particular, the deficit reaching 30% of GDP triggering hyperinflation was politically destabilizing and came after Gorbachev had allowed the opening of the political system, enabling Nationalist parties to work the economic issues to their political advantage.

As for Russification, Gorbachev wasn't able to make personnel changes of note until late in his reign in Ukraine and Russian language publications continued to predominate until the late 2000s/early 2010s, long after independence and the remove of central control from Moscow. Circulation numbers on publications support this, given those were less subject to central control; the Communist Party could limit publication of books, but circulation of existing materials show a marked decline of Ukrainian language materials as well.