What is an economic reform?

The post-Stalin Soviet leadership was never totally satisfied with the performance of the economic system. Declining growth rates, pervasive imbalances and inefficiencies, an inability to innovate and to serve consumer needs – all these systemic defects have served as a continuous pressure for change. During the last thirty-five years political response to such pressure has varied. There have been times when the leadership has believed in the sufficiency of fine-tuning by economic policy measures: resources have been reallocated from one branch or region to another, prices have been adjusted and wage scales redrafted. The results of such policy measures have been modest, and the policy leadership has therefore repeatedly groped for more far-reaching change in the economic system.

Changes in the economic system proper, as distinct from policy measures, can be called economic reforms. The reforms that the Soviet Union has gone through so far have been partial. They have affected only some or perhaps just one of the fundamental institutions of the economic system. In the seventies such reform activity came to be seen as a continuous process of ‘perfecting’ (sovershenstvovanie) the economic, system. Such reforms have not reached the goals set for them, either because they have been badly designed and executed or because an economic system – somewhat like a living organism – has a tendency to reject alien parts and thus render all partial reforms necessarily inefficient. If the latter is the case only a comprehensive economic reform – one encompassing the whole economic system – has any chance of succeeding. This is, of course, the conclusion behind Gorbachev's perestroika reforms.