6 ms·

Exactly the opposite happened in Russia and other ex-soviet countries. The factories were sold and dismantled under the pretense of “transitioning to market eco

by f6v 6y ago

Exactly the opposite happened in Russia and other ex-soviet countries. The factories were sold and dismantled under the pretense of “transitioning to market economy”.

tasubotadas 6y ago
They were non-competitive businesses producing outdated junk and in majority of cases there was no other way to survive apart of being sold for scrap. Some manufacturers that produced basic sellable goods survived (steel foundries, fertilizer makers)
- lumost 6y ago
  Price signals following the soviet collapse were non functioning ( see the current oligarchs ). It’s hard to know how many of these factories could have adapted over a slightly longer time frame or with some slight investment restructuring. When the price of a corporation falls below their paper assets it tends to attract A certain kind of investor disinterested in long term value. I’d venture a good number of soviet parts suppliers saw their revenues dry up when their clients were dismantled, it wouldn’t have taken more than a few such links in the supply chain being dismantled to break the entire supply chain given the level of centralization.
- chx 6y ago
  This is not true, several precision mechanics factories (or parts of factories) in Hungary were producing for Western export and yet they let them rot apart.
  - aries1980 6y ago
    Indeed. In my hometown - Gyula, Hungary - there was a precision mechanics factory, for phones, faxes, communication relays called Integra. It wasn't huge, employed a couple of hundreds people. In '89, Olivetti bought it for peanuts to close it down. This was quite a classic move during the "privatisation" in '89-90.
  - exebook 6y ago
    Same happened in Latvia where the largest soviet chip maker ALFA was dismatled under silly (but efficient) propaganda premises. It was top notch and had great contracts with US and Russia at the moment. Decades later the retired goverment officials confirmed they were "advised" and said "we did not understand what we were doing very much back then". Of course, they were ex-soviet middle level officials and anti soviet activists who suddenly found themselves in power and needed such advices. The true reason for those who wonder was the fact that ALFA was making electronics for MiG, Su, Tu and for missiles. I had family and friends working there btw.
- eecc 6y ago
  No. There’s significant evidence that sudden overnight market manipulation (e.g. setting exchange parity to the eastern and western Deutsche Mark destroyed all eastern consumer goods industries, which were bought for symbolic sums and then deliberately shuttered.) it’s obvious that any such fundamentalist and radically liberalist policy would have tore through any economy, but the point was to smother Carthage, and sow salt on its ruins
  - kolinko 6y ago
    https://i.imgur.com/jp4spsj.png https://i.imgur.com/jp4spsj.png One country took the radical/liberalist path, another chose the one that doesn’t tarnish the economy. As much as I hate libertarians today, in 1990s they did an awesome job.
    - kazen44 6y ago
      this graph does not take into the account the massive geopolitical difference between ukraine and poland, especially considering poland had far more possibilities in regards to joining and integrating with western european economies compared to ukraine. Don't forget that prior the collapse of the USSR, ukraine was not an independant country from russia, while poland has always been "independant" during socialist times.
      - kolinko 6y ago
        As for geopolitical differences - how about Estonia/Lithuania/Ukraine? I’m not sure how the went about with their provatisation in 1990s.
- f6v 6y ago
  That’s exactly the narrative that was used. I guess that’s why Yeltsin was such a good friend to the west and why he’s despised by many Russians. I mean, sure, many factories were not competitive since they were highly subsidized and faced no competition on internal market. But USSR had an immense R&D potential and engineering education was top-notch.
- dzhiurgis 6y ago
  Some fertiliser plants (Achema for example) still rely on exclusively signed contracts with Russia for buying cheap natural gas (its main cost) aka there’s some underwater influence there.
stelonix 6y ago
Most of the time with countries not directly aligned to the west, the preaching is for us to sell our strategic industries in name of liberalism and "economic openness", usually spreading lies and misinformation about the company's efficiency. When it's the other way around, it's protectionism and good old Keynesian economics: China can't buy that company, their 5g is evil etc. I know this first-hand because it has happened to my country each and every time an US backed president was elect. It's happening right now, they're attempting to sell our only semiconductor company. The Soviet Union was destroyed from within much the same way the 2010s arab springs/ukraine and more recently also tried with HK.
- deleted 6y ago
  [deleted]
- samat 6y ago
  There is a popular myth that 'there was a mighty USSR and some enemies ruined it'. The Soviet Union collapsed because of massively broken economy. That's just basic science. They exported oil and imported grain. Russia imported GRAIN for gods sake. Then oil prices collapsed. Next? They did nothing and just ate through the resources until they were no more. And then 'evil liberals/evil west destroying the great country' happened, when finally USSR had no money to pay for the social obligations and for massive military. This are the undisputed facts, supported by a vast trove of internal documents from the late USSR and first years of the Russian Federations. A monograph by Egor Gaidar [1] is an excellent source referencing tons of the original documents. Sorry for Russian, not sure this is available in English anywhere. I get that it's easier to think that source of our problems is some evil mastermind and conspiracy. But think of the Occam's razor — this is explained much easier by sheer incompetency and stupidity and no checks and balances to mitigate them. 1. https://ru.wikipedia.org/wiki/Гибель_империи_(монография) https://ru.wikipedia.org/wiki/Гибель_империи_(монография)
  - f6v 6y ago
    The truth is in between. Was USSR full of internal problems? Yes. Did USA and allies want USSR destroyed and actively work on? Also yes. Saying that Cold War and the arms race had absolutely no role in USSR collapse is either a blatant lie or incompetence.
akrymski 6y ago
Assets were sold to friends and family, with massive kickbacks and for a fraction of their market value. This can't happen in EU today.

by f6v 6y ago

Exactly the opposite happened in Russia and other ex-soviet countries. The factories were sold and dismantled under the pretense of “transitioning to market economy”.

tasubotadas 6y ago

They were non-competitive businesses producing outdated junk and in majority of cases there was no other way to survive apart of being sold for scrap. Some manufacturers that produced basic sellable goods survived (steel foundries, fertilizer makers)

lumost 6y ago
Price signals following the soviet collapse were non functioning ( see the current oligarchs ). It’s hard to know how many of these factories could have adapted over a slightly longer time frame or with some slight investment restructuring. When the price of a corporation falls below their paper assets it tends to attract A certain kind of investor disinterested in long term value. I’d venture a good number of soviet parts suppliers saw their revenues dry up when their clients were dismantled, it wouldn’t have taken more than a few such links in the supply chain being dismantled to break the entire supply chain given the level of centralization.
chx 6y ago
This is not true, several precision mechanics factories (or parts of factories) in Hungary were producing for Western export and yet they let them rot apart.
- aries1980 6y ago
  Indeed. In my hometown - Gyula, Hungary - there was a precision mechanics factory, for phones, faxes, communication relays called Integra. It wasn't huge, employed a couple of hundreds people. In '89, Olivetti bought it for peanuts to close it down. This was quite a classic move during the "privatisation" in '89-90.
- exebook 6y ago
  Same happened in Latvia where the largest soviet chip maker ALFA was dismatled under silly (but efficient) propaganda premises. It was top notch and had great contracts with US and Russia at the moment. Decades later the retired goverment officials confirmed they were "advised" and said "we did not understand what we were doing very much back then". Of course, they were ex-soviet middle level officials and anti soviet activists who suddenly found themselves in power and needed such advices. The true reason for those who wonder was the fact that ALFA was making electronics for MiG, Su, Tu and for missiles. I had family and friends working there btw.
eecc 6y ago
No. There’s significant evidence that sudden overnight market manipulation (e.g. setting exchange parity to the eastern and western Deutsche Mark destroyed all eastern consumer goods industries, which were bought for symbolic sums and then deliberately shuttered.) it’s obvious that any such fundamentalist and radically liberalist policy would have tore through any economy, but the point was to smother Carthage, and sow salt on its ruins
- kolinko 6y ago
  https://i.imgur.com/jp4spsj.png https://i.imgur.com/jp4spsj.png One country took the radical/liberalist path, another chose the one that doesn’t tarnish the economy. As much as I hate libertarians today, in 1990s they did an awesome job.
  - kazen44 6y ago
    this graph does not take into the account the massive geopolitical difference between ukraine and poland, especially considering poland had far more possibilities in regards to joining and integrating with western european economies compared to ukraine. Don't forget that prior the collapse of the USSR, ukraine was not an independant country from russia, while poland has always been "independant" during socialist times.
    - kolinko 6y ago
      As for geopolitical differences - how about Estonia/Lithuania/Ukraine? I’m not sure how the went about with their provatisation in 1990s.
f6v 6y ago
That’s exactly the narrative that was used. I guess that’s why Yeltsin was such a good friend to the west and why he’s despised by many Russians. I mean, sure, many factories were not competitive since they were highly subsidized and faced no competition on internal market. But USSR had an immense R&D potential and engineering education was top-notch.
dzhiurgis 6y ago
Some fertiliser plants (Achema for example) still rely on exclusively signed contracts with Russia for buying cheap natural gas (its main cost) aka there’s some underwater influence there.

stelonix 6y ago

Most of the time with countries not directly aligned to the west, the preaching is for us to sell our strategic industries in name of liberalism and "economic openness", usually spreading lies and misinformation about the company's efficiency. When it's the other way around, it's protectionism and good old Keynesian economics: China can't buy that company, their 5g is evil etc. I know this first-hand because it has happened to my country each and every time an US backed president was elect. It's happening right now, they're attempting to sell our only semiconductor company. The Soviet Union was destroyed from within much the same way the 2010s arab springs/ukraine and more recently also tried with HK.

deleted 6y ago
[deleted]
samat 6y ago
There is a popular myth that 'there was a mighty USSR and some enemies ruined it'. The Soviet Union collapsed because of massively broken economy. That's just basic science. They exported oil and imported grain. Russia imported GRAIN for gods sake. Then oil prices collapsed. Next? They did nothing and just ate through the resources until they were no more. And then 'evil liberals/evil west destroying the great country' happened, when finally USSR had no money to pay for the social obligations and for massive military. This are the undisputed facts, supported by a vast trove of internal documents from the late USSR and first years of the Russian Federations. A monograph by Egor Gaidar [1] is an excellent source referencing tons of the original documents. Sorry for Russian, not sure this is available in English anywhere. I get that it's easier to think that source of our problems is some evil mastermind and conspiracy. But think of the Occam's razor — this is explained much easier by sheer incompetency and stupidity and no checks and balances to mitigate them. 1. https://ru.wikipedia.org/wiki/Гибель_империи_(монография) https://ru.wikipedia.org/wiki/Гибель_империи_(монография)
- f6v 6y ago
  The truth is in between. Was USSR full of internal problems? Yes. Did USA and allies want USSR destroyed and actively work on? Also yes. Saying that Cold War and the arms race had absolutely no role in USSR collapse is either a blatant lie or incompetence.

akrymski 6y ago

Assets were sold to friends and family, with massive kickbacks and for a fraction of their market value. This can't happen in EU today.