Editing Perestroika (section)

==Economic reforms==
In May 1985, [[Mikhail Gorbachev]] gave a speech in [[Saint Petersburg|Leningrad]] in which he admitted the slowing of economic development, and inadequate living standards.<ref>{{cite news|url=http://www.saint-petersburg.com/history/leningrad-under-gorbachev/|title=Leningrad under Gorbachev: Perestroika and the fall of Communism (1984–1991)}}</ref>

The program was furthered at the [[27th Congress of the Communist Party of the Soviet Union|27th Congress of the Communist Party]] in Gorbachev's report to the congress, in which he spoke about "''perestroika,''" "''[[uskoreniye]]''" (acceleration), "human factor," "''[[glasnost]]''" (transparency), and "expansion of the ''[[khozraschyot]]''" (accounting).

During the initial period (1985–87) of Mikhail Gorbachev's time in power, he talked about modifying [[central planning]] but did not make any truly fundamental changes (''[[uskoreniye]]''; "acceleration"). Gorbachev and his team of economic advisors then introduced more fundamental reforms, which became known as ''perestroika'' (restructuring).

At the June 1987 [[plenary session]] of the [[Central Committee of the Communist Party of the Soviet Union]], Gorbachev presented his "basic theses," which laid the political foundation of economic reform for the remainder of the existence of the Soviet Union.

In July 1987, the [[Supreme Soviet of the Soviet Union]] passed the Law on State Enterprise.<ref>{{cite news|url=https://www.nytimes.com/1987/06/04/world/new-struggle-in-the-kremlin-how-to-change-the-economy.html?pagewanted=1|title=New struggle in the Kremlin: How to change the economy|last=Bill|first=Keller|date=4 June 1987|work=The New York Times|access-date=7 February 2017}}</ref> The law stipulated that state enterprises were free to determine output levels based on demand from consumers and other enterprises. Enterprises had to fulfil state orders, but they could dispose of the remaining output as they saw fit. However, at the same time the state still held control over the means of production for these enterprises, thus limiting their ability to enact full-cost accountability. Enterprises bought input from suppliers at negotiated contract prices. Under the law, enterprises became self-financing; that is, they had to cover expenses (wages, taxes, supplies, and debt service) through revenues. Finally, the law shifted control over the enterprise operations from [[Ministries of the Soviet Union|ministries]] to elected workers' collectives. [[Gosplan]]'s responsibilities were to supply general guidelines and national investment priorities.

The [[Law on Cooperatives]], enacted in May 1988,<ref>Brooks, Karen M. (1988). ''[http://ageconsearch.umn.edu/bitstream/13265/1/p88-29.pdf The Law on Cooperatives, Retail Food Prices, and the Farm Financial Crisis in the U.S.S.R.]'' ([[PDF]]). University of Minnesota. Department of Agricultural and Applied Economics. Retrieved on 14 August 2009.</ref> was perhaps the most radical of the economic reforms during the early part of the Gorbachev era.<ref>{{Cite news |title=LEGISLATORS WEIGH IN ON COOPERATIVES LAW |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/archive/politics/1988/05/27/legislators-weigh-in-on-cooperatives-law/b0796654-fb04-4658-8bd5-459fe5eecc05/}}</ref> For the first time since [[Vladimir Lenin]]'s [[New Economic Policy]] was abolished in 1928, the law permitted [[private ownership]] of businesses in the services, manufacturing, and foreign-trade sectors. The law initially imposed high taxes and employment restrictions, but it later revised these to avoid discouraging private-sector activity. Under this provision, cooperative restaurants, shops, and manufacturers became part of the Soviet scene.

[[Alexander Yakovlev]] was considered to be the intellectual force behind Gorbachev's reform program of ''[[glasnost]]'' and ''perestroika''.<ref>{{Cite web |date=2022-03-29 |title=Deadlock of "Perestroika" |url=https://www.uawarexplained.com/deadlock-perestroika/?version=sixty-minutes/ |access-date=2022-03-29 |website=UaWarExplained.com |language=en |archive-date=2022-11-27 |archive-url=https://web.archive.org/web/20221127151953/https://www.uawarexplained.com/deadlock-perestroika/?version=sixty-minutes/ |url-status=dead }}</ref> In the summer of 1985, Yakovlev became head of the propaganda department of the CPSU Central Committee. He argued in favor of the reform programs and played a key role in executing those policies.

{{Blockquote|After the [[20th Congress of the Communist Party of the Soviet Union|XX Congress]], in an ultra-narrow circle of our closest friends and associates, we often discussed the problems of democratization of the country and society. We chose a simple – like a sledgehammer – method of propagating the "ideas" of late [[Vladimir Lenin|Lenin]]. A group of true, not imaginary reformers developed (of course, orally) the following plan: to strike with the authority of Lenin at [[Joseph Stalin|Stalin]], at [[Stalinism]]. And then, if successful, – to strike with Plekhanov and [[Social Democracy]] – at Lenin, and then – with liberalism and "moral socialism" – at revolutionarism in general{{nbsp}}....
The Soviet totalitarian regime could be destroyed only through ''glasnost'' and totalitarian party discipline, while hiding behind the interests of improving socialism. [...] Looking back, I can proudly say that a clever, but very simple tactic – the mechanisms of totalitarianism against the system of totalitarianism – has worked.<ref>{{cite web|url=http://agitclub.ru/gorby/ussr/blackbook1.htm|title=ЧЕРНАЯ КНИГА КОММУНИЗМА|website=agitclub.ru|archive-url=https://web.archive.org/web/20201104135633/http://agitclub.ru/gorby/ussr/blackbook1.htm|archive-date=2020-11-04}}</ref>|source=Yakovlev, as quoted in the introduction to ''[[Black Book of Communism]]''}}

The most significant of Gorbachev's reforms in the foreign economic sector allowed foreigners to invest in the Soviet Union in the form of [[joint venture]]s with Soviet ministries, state enterprises, and cooperatives. The original version of the Soviet Joint Venture Law, which went into effect in June 1987, limited foreign shares of a Soviet venture to 49 percent and required that Soviet citizens occupy the positions of chairman and general manager. After potential Western partners complained, the government revised the regulations to allow majority foreign ownership and control. Under the terms of the Joint Venture Law, the Soviet partner supplied labor, infrastructure, and a potentially large domestic market. The foreign partner supplied capital, technology, entrepreneurial expertise, and in many cases, products and services of world competitive quality.

Gorbachev's economic changes did not do much to improve the country's sluggish economy in the late 1980s. The reforms decentralized things to some extent, although price controls remained, as did the ruble's inconvertibility and most government controls over the means of production.