“Did an Oil Crisis Cause the Transition in the Soviet Union?”

“If Marxist-Leninist Communism was so inefficient, then why did it last in one form or another for over 70 years in Russia and the Soviet Union before it finally died. Did it last so long because inherently it provides a good economic system or did it last so long because inherently it was not as inefficient as we are made to believe, but that some other circumstances caused its demise? We believe the latter. The Soviet system was not spectacularly inefficient and was an adequate, though far below average, system for running an economy. As long as there were plenty of resources, the Soviet economy could continue running. However, rather like a gas-guzzling car, the planned economies became spectacularly inefficient in the face of resource scarcity, particularly oil scarcity. A planned economy is not flexible enough to reallocate quickly scarce resources that suddenly decline in production.”


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