Economic Reforms in the Soviet Union: A Transformation to the Market

In August of 1990, the Soviet economy was in such bad shape that Mikhail Gorbachev sequestered his leading reform-minded economists to study and recommend a solution. Led by Stanislav Shatalin, these economists drafted the 500 Day Plan detailing the necessary steps to transform the Soviet economy from a centrally planned to a market economy. Gorbachev initially endorsed this plan and the world-wide expectation and wonder was not whether the Soviet Union would transform its economy to a market economy, but when and how fast such a transformation should or could take place. This study will first present what the author believes to be the key components of a successful transformation to a market economy. Next, the study will examine the 500 Day Plan or Shatalin Plan and compare and contrast it to the Council of Ministers alternative reform proposal known as the Ryzhkov Plan recommended by the Prime Mininste Nikolai Ryzhkov.