Cooperative enterprises

Definition

Cooperative enterprises are businesses owned and operated by a group of individuals for their mutual benefit, emphasizing democratic control and shared economic interests. These enterprises gained prominence in the Soviet Union during the implementation of perestroika and glasnost, as they represented a shift towards more market-oriented practices and greater individual autonomy within the planned economy. This transformation allowed citizens to engage in self-managed production and services, reflecting a departure from state-controlled models.

5 Must Know Facts For Your Next Test

1. The rise of cooperative enterprises was encouraged during perestroika as a way to stimulate local economies and reduce dependence on state-run businesses.
2. Cooperatives offered citizens a chance to participate in entrepreneurship, enabling them to establish businesses that directly served their community's needs.
3. The legal framework for cooperative enterprises was established under Gorbachev's reforms, allowing for greater autonomy from traditional state enterprise structures.
4. Many cooperative enterprises struggled to compete with larger state-owned firms, often facing challenges in access to resources and markets.
5. The growth of cooperatives marked a significant cultural shift, as individuals began to embrace entrepreneurial initiatives and collaborative efforts outside of the government’s control.

Review Questions

• How did cooperative enterprises reflect the goals of perestroika in the Soviet Union?
  • Cooperative enterprises were aligned with the goals of perestroika as they aimed to decentralize the economy and introduce elements of market practices. By allowing individuals to own and operate businesses collaboratively, these enterprises encouraged self-management and local decision-making. This shift from state control to collective ownership represented a significant step toward economic liberalization, which was central to Gorbachev's vision for reforming the Soviet system.
• Discuss the impact of glasnost on the development and operations of cooperative enterprises during this period.
  • Glasnost played a crucial role in fostering an environment where cooperative enterprises could thrive by promoting openness and transparency. The policy encouraged public discussions about economic alternatives to state control, allowing citizens to voice their ideas about self-managed businesses. This newfound freedom helped cooperatives gain social acceptance and legitimacy, making it easier for them to establish themselves in a previously restrictive economic landscape.
• Evaluate the long-term implications of cooperative enterprises on post-Soviet economic development.
  • The establishment of cooperative enterprises during perestroika laid the groundwork for significant shifts in post-Soviet economic development. As these enterprises grew, they contributed to the emergence of a more diverse economic landscape that included elements of both capitalism and socialism. The experiences gained from running cooperatives influenced new business practices in the former Soviet republics, encouraging further privatization efforts and the adoption of market-oriented policies. This transition ultimately contributed to the ongoing challenges faced by post-Soviet economies as they navigated their paths towards integration into global markets.

Related terms

perestroika:

A series of political and economic reforms initiated by Mikhail Gorbachev in the mid-1980s aimed at restructuring the Soviet economy towards more decentralized decision-making.

glasnost:

A policy introduced by Gorbachev that promoted transparency, openness, and freedom of expression in government and society, allowing for greater public discourse.

market socialism:

An economic system that incorporates elements of both socialism and capitalism, allowing for some degree of private ownership and market-driven allocation of resources.