Question

Mention any three features that distinguish the Soviet economy from that of a capitalist country like the US.

Answer 1

The Soviet model of economy was the result of the Socialist revolution in Russia in 1917 that was based on the ideology of socialism, which emerged as reaction to capitalism. It argued for state control over the economy and over the means of production in order to create an egalitarian society. Socialists identified the existence of private property as the basis for all evils in the society.

Three features that distinguish the Soviet economy from that of the capitalist economy of the US are as follows:

a. State control over the economy- The Soviet model had established total state control over the economic structure. The state established control over basic industries like oil, iron and steel. It had developed a vast network of communication system that connected remotest areas in the state. Unlike the Soviet model, the US capitalist model encouraged private entrepreneurship, economic freedom and allowed for free play of market forces.
b. Soviet model was based on socialism- The Soviet economy model was based on the principles of socialism which identified the existence of private property as the basis for all evils in the society. It was argued that the state must own all property and must work for the welfare of the entire society. The ideology of socialism was driven by the motive of bringing about social welfare through social ownership. The US model, on the other hand, was based on the principles of capitalism which allowed for private ownership of means of production.
c. Soviet model aimed at social welfare- Since the Soviet economy was completely regulated and controlled by the state, it ensured minimum standard of living to all. The government subsidised basic necessities including health, education and childcare as well as introduced other welfare schemes. This model was guided by the motive of social welfare; it did not encourage private property unlike the US economy, where private ownership and property formed the basis of society.