To what extent should the central

government influence economic growth in

the Soviet Union?

What are the two basic features of the Soviet centrally planned economy?

Economic Features

State Ownership & Control

Central Planning of Production

State Ownership and ControlThe government owned and controlled all means of production. The state was the sole employer. Private ownership and control was not

permitted.

State Ownership and Control

The state controlled all the means of production with no say in how the means of production were used:– All natural resources (land)– Controlled workforce (labor)– and owned all manufacturing facilities,

communication, transportation, power, banks and stored (capital)

Central Planning of ProductionAll major economic decisions were made be a small group of planners

and recorded in a document called “The Plan”

Central Planning of Production

The plan outlined the decisions of leaders into a long term plan or economic program.– Officially the goal of the country’s economic program was

to increase the Soviet people’s living standards. – Gosplan – was the official State Planning Commission

who tried to solve the problem of scarcity through central planning by asking 4 questions• What goods and services should be produced?• How should they be produced?• For whom should they be produced?• How much, how fast?

Economics

Resources

Wants

Unlimited Resources + Unlimited Wants =

Balance

Limited Resources + Unlimited Wants =

Scarcity

Limited Resources + Limited wants =

Balance

Value Positions

Market Economy• There should be individual ownership• Also called capitalism, Free Enterprise, Private Ownership

Command Economy• Common ownership• Also called CPE, Planned Economy, Socialism, Collective Ownership

Let’s tackle page 161. Question 2,4

Gosplan

• Was the central agency of the Soviet economy• The group broke down production targets for

each industry and than into major targets for regions and for collectives.

• Directors received adjusted targets and work began at reaching the goal.

• All reported back to the Communist Party

Central Planning of Production

To what extent should our faith influence

our finances and spending habits?

To what extent should the central

government influence economic growth in

the Soviet Union?