Mini Economy Analyse for Russia

Topics: Economic system, Planned economy, Mixed economy Pages: 4 (1012 words) Published: April 20, 2013
Before the Bolshevik Revolution, Russia was in the traditional economy. Which mean Russia was under-developed country. It both has the advantages and disadvantages. In the traditional economy system, everyone knew the three basic economy questions (what to produce; how to produce; for whom to produce). They produced what their former generation produced. Farming, hunting, and gathering as three basic ways to live were done the same way as the generation before. Also, customs gave the economic decisions that were made. Economic activities were centered round the family or the ethic unit. Needless to say, men and women were given different economic roles and tasks. Men used to produce the product and women had responsibilities on feeding children.

As Russia participated in W.W.I, the traditional economy had no ability to support such a giant country any more. Because of many supplies were sent to the battlefield, basic livings in Russia were more expensive than gold, and the government had no ability to satisfy the public basic wants. The basic economy question, unlimited wants plus limited resources equals scarcity, appears. Once the question became more serious in the society, the public became “unstable” and tried to find a new system to run the economy. Finally, Russia established USSR-the first planned economy country in the world.

In fact, command economy had no effect on Russia, at least, Russia overthrew commend economy and became market economy.

Reasons for the collapse of command economy systems

The central government lacked of long-term planning and caused excessive resource wastage. In the middle of 20th century, as USSR became the only planning economy country in the world, the central government took the biggest power to decide the three basic economic questions (what to produce; how to produce; to whom to produce). The central government just satisfied people’s basic wants. Many attentions were put on developing the military weapons and...
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