Question

Mention three separate features of economy of Soviet Union and United States of America.

Hint:

To easily remember the differences, think of the core ideological conflict: Collectivism vs. Individualism. The Soviet economy was designed for the collective state's goals, while the US economy is built around individual economic freedom and choice.

Answer 1

Step 1: Understanding the Concept:
During the Cold War, the Soviet Union and the United States represented two opposing economic ideologies. The USSR followed a communist model of a state-controlled command economy, while the US championed a capitalist model of a free-market economy.
Step 2: Detailed Explanation:
Three Features of the Soviet Union's Economy:
1. State Ownership of all Means of Production: In the Soviet system, there was no private property. The state owned and controlled all productive assets, including land, factories, mines, and banks. All citizens were essentially employees of the state.
2. Centralized Planning: The economy was not driven by market forces but by a series of detailed Five-Year Plans formulated by a central planning agency called Gosplan. The state decided what goods would be produced, in what quantities, and at what prices. This led to a lack of responsiveness to consumer needs.
3. Priority to Heavy Industry and Military: The central plans consistently prioritized the development of heavy industry (steel, machinery, energy) and the military-industrial complex. This came at the expense of consumer goods, leading to frequent shortages, long queues, and poor quality of products available to the general public.
Three Features of the United States' Economy:
1. Private Ownership and Enterprise: The means of production are predominantly owned by private individuals and corporations. Citizens have the right to own property and start businesses to make a profit. This creates a competitive environment.
2. Market-Based System (Supply and Demand): Economic decisions are driven by the free interaction of producers and consumers in the market. Prices are determined by the forces of supply and demand, not by government decree. This allows for efficient allocation of resources based on societal wants.
3. Consumer Sovereignty and Choice: The consumer is considered "king" in a market economy. Production is largely dictated by consumer preferences and demand. This results in a wide variety of goods and services, innovation, and a focus on quality and customer satisfaction.
Step 3: Final Answer:
The key economic distinctions lie in ownership (State in USSR vs. Private in USA), decision-making (Central Planning in USSR vs. Market Forces in USA), and primary focus (Heavy Industry in USSR vs. Consumer Goods in USA).