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The Union of Soviet Socialist Republics (USSR) or Soviet Union was established in December 1922 by the leaders of the Russian Communist Party. It included four constituent republics: The Russian Soviet Federated Socialist Republic (RSFSR), Ukrainian SSR, Belarusian SSR, and the Transcaucasian SFSR.

Vladimir Lenin, the communist politician who worked to create a socialist economic system in Russia, headed the soviet state during its initial years. After his death in 1924, Joseph Stalin assumed the leading role of the state. He served as the first General-Secretary of the Soviet Union's Central Committee from 1922 until his death in 1953.

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Stalin launched a command economy replacing the New Economic Policy of the 1920's with his proposed First Five-Year Plan in 1928. Having this centralized structure, all economic activities from the accumulation of capital resources, control of agricultural activities, manufacturing of goods and up to their pricing and distribution to the market are performed and regulated solely by the government.

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The government's taking control of the agriculture had roused protests from about a million individual peasants who were forced off their lands in the passing of a decree in February 1930 regarding the collectivization of farming. The bad weather, aggravated by deficiencies of the hastily established collective farms and massive grain confiscation resulted into serious famine. Millions of peasants in Ukraine and in some parts of southwestern Russia died of starvation. This event drove millions of desperate peasants to seek job in the rapidly growing cities, invigorating industrialization and greatly increasing the urban population in a few years time.

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The Supreme Soviet of Russia withdrew Russia from the Soviet Union on December 12. The Soviet Union officially ended on December 25, 1991 and the Russian Federation took power on December 26. The Russian Government lifted price control on January 1992. Hyperinflation occurred but shortages disappeared.

After the rough challenges towards capitalism, Russia has developed a more market-based and globally-integrated economy. At present, most business enterprises and industries are owned by private individuals. The market prices are not controlled by one regulating body, such as the government in a command system, but established by buyers and sellers or the force of supply and demand. The economy, participated by foreign and local business has become globally competitive. Competition in the market brought service and product improvements, and therefore increasing the quality of living for the Russian populace.

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It is during President Vladimir Putin's eight year-term (elected in 2000 and re-elected in 2004) when Russia bounced back from crisis. The current president, Dmitry Medvedev campaigns towards technological innovation and privatization of giant state corporations. Today, the Russian economy stands to be the 12th largest in the world by nominal value and 6th largest by purchasing power parity.

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