Failing Economy

Moscow Russia Tourist Information and Travel Guide

One of the many reasons for the collapse of the Soviet Union was the overall failure of its "command economy".

Unlike a "market economy" where prices of goods and services are set by the forces or supply and demand,  prices were arbitrarily set by the government.  Scarce resources were allocated based on government priorities rather than on the purchasing decisions of consumers.

Moscow Shops
Shops in Moscow USSR (1971)

Because it is impossible for government to make the millions of detailed decisions required to keep an economy running, serious problems resulted.

The photograph above, taken in 1971, shows stores in Moscow with limited supplies and a poor selection of consumer products.  Fruits and vegetables were often unavailable or of poor quality due to problems throughout the supply chain.

Muscovites routinely had to stand in long queues to purchase everyday consumer items.  This time lost was a hidden economic cost that also caused resentment of the government.

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