The command economy and its consequences

​The Estonian Republic had been grounded on farm-based agriculture and industry depending on local resources and labour force. The breaking down of the Estonian economic system started in the first year of Soviet regime (1940-1941), but the economic model of a small state was completely destroyed in the post-war period. This was achieved with the help of land reform, forced collectivisation (creating of collective farms) and forced industrialisation and with the establishment of a rigid state-planned economy. Thus began the reign of the command economy in Estonia, paying no attention to local resources of raw materials and labour, historical traditions of production or local needs. Later, in the early 1960s, attempts were made in Moscow to reduce the centralised nature of the Soviet economy by creating the so-called national economy councils, but they had no lasting effect.

​Large industrial enterprises created in Estonia needed many specially trained workers, causing a massive influx of migrant workers. The preferential development of heavy industry (including military industry) and the establishment of state-controlled distribution of goods instead of normal market relations caused a permanent shortage of consumer goods and groceries (the so-called deficit) in the Soviet Union. At the same time, the living standard and consumption level in the Estonian SSR during the post-war low and even later remained much higher than elsewhere in the Union.

​In spite of the Iron Curtain, knowledge and even material proofs of the living standard of common people in the Western countries reached Estonia (mostly as mail packages sent by relatives living in the Western countries, and also via Finnish tourists). For other regions of the SU, Estonia became a kind of a “Western oasis” – the Soviet West (Sovetskiy Zapad). Estonians, in their turn, took the Finns as their models, learning about their everyday life, but also about the operation of a parliamentary state, on Finnish TV. The outward “Westernisation” of the ESSR was mostly expressed in the “acquiring” of material prosperity which attracted large numbers of immigrants. Better economic conditions favoured the further adaptation of the younger and middle generations of Estonians to the Soviet system.

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