I had to laugh at this, not because its not true. (Indeed everything I've read confirms it):
"Soviet economic policy was largely driven by political reasons. The outlying Republics were heavily subsidized to keep nationalist separatism down...."
But didn't anyone realise that subsidising outlying republic aggravated nationalism, rather than limiting it.
I still think Chris is refusing to grasp the nettle: The Soviet economy could hardly be called a national economy. It had no real tendency towards centralisation of resources, nor to create a national division of labour.
Rather than lose control of them to the centre enterprises hoarded labour and materials; so-called goods were barely use-values at all, just objects created to fill the letter of the plan; regions tended towards autarky, reproducing effort because of a lack of trust between different sectors of the economy; tremendous amount or resources were dedicated to repairing badly made goods; priority allocation schemes were created to side-step the sclerotic planning mechanisms; waste was the norm.
While developing economies tended towards assimilation of parochial distinctions, the Soviet Union actively generated them, because it was not a national economy in any real sense of the term. -- James Heartfield The 'Death of the Subject' Explained is available at GBP11.00, plus GBP1.00 p&p from Publications, audacity.org, 8 College Close, Hackney, London, E9 6ER. Make cheques payable to 'Audacity Ltd'