Central Planning (was Science, Science and Marxism)

Justin Schwartz jkschw at hotmail.com
Fri Jan 18 10:51:42 PST 2002



>Any opinion, as I understand you're something of a Sovietologist (unless
>I'm
>confusing you with someone else)

No, I am. or was, when I was a Prof., a Sovietologist as part of my work.

as to why stagnation only started in the
>Brezhnev era?

It didn't really; there were problems noted at the very beginning of the Brezhnev years that had developed under Khrushchev, and these led Kosygin to attempt to implement a (very weak) set of market-oriented reforms starting in 1965. These were sorta rolled backed after Czecho '68 because of ideology, but a version came back in theearly 70s.

My common-sense interpretation would be that central planning
>is good at building the base of an economy (build this factory now!) but
>bad
>at coordinating it once it exists.

In part. The usual expalantion is that planning is good for "extensive" development, where progress can be measured by simple indicators (tons of steel, kilowatts of electricity, and the like), but starts to do poorly for "intensive" development, where quality counts, and there is no one simple dimesnion that provides an obviosu target.

In addition, in Soviet circumstamces, you have to understand that the USSR was built from the bottom up twice, once after the civil war, and the second time after the Great Patriotic War (WWII, to you 'Mericans), when basically im both cases it was completely demolished. So there was a great deal of fast progress in the first fifteen years in each case that leveled off rapidly, as is only natural. After the GPW, the Soviets had nowhere to go but up.


>
>Why did the economy only really shrink during Perestroika? Poorly attempted
>reforms? System too ossifed to accept change without collapse? Sabotage
>(Gorbachev says p's opponents were trying to wreck the banking system)?

Complex question, no simple answer. My _short_ answer is that Gorby, with a naive faith that markets are "natural" and will flourish and grow even without a stable legal and financial system, dismantled central planning without having anything to put in its place. There were other importsnt things too: the decline in oil prices and rise in wheat prices hurt Soviet trade balances, the US was trying really hard to throw wrenches into the works with destructive loan conditions and military pressures. There was a lot of bureaucratic foot-dragging. And the perestroikichi lacked contact with a social base other than a thin level of middle class people like themselves, so they were unable to either use the Party apparat or to appeal to people's heads over the Party. I had a piece that came out just before the collapse in the 1991 Socialist Register that I still think was pretty darn good.

jks


>
>Chris Doss
>The Russia Journal
>---------------------------
>
>
>Date: Fri, 18 Jan 2002 15:16:06 +0000
>From: "Justin Schwartz" <jkschw at hotmail.com>
>Subject: RE: Science, Science and Marxism
>
>Planned systems are OK at simply defined crash projects to which unlimited
>resources can be devoted. The Soviets had a handful of good products in
>machine tools, weapons systems, and the like. But you can't eat that stuff.
>Despite decades of efforts under Brezhnev, they failed to develop adequate
>consumer goods because you can't treat them like Kalashnikovs. Economists
>call this the difference between intensive and extensive development. This
>is tedious. Go read, e,g., Ellman's Socialsit Planning or Shmelev's &
>Popov's TheTurning point, or Nove's Economics of Feasile Socialism, or
>Kornai's The Socialsit System, and then if you want to discuss this stuff
>we
>
>can do so in an informed way. jks
> >
> >jks -- There's no comparison with Soviet goods, none. Soviet TV sets
> >regularly
> >exploded; the smart purchaser kept a bucket of sand by the set. There was
>a
> >actually a TV show under perestroika that was based on making fun of
> >worthless goods. A handful of Soviet products, machine tools and the
>like,
> >were world market quality. For the rest, Soviet industry made stuff that
> >was
> >
> >unmarketable.
> >
> >They built pretty good MiGs and Kalashnikovs and space stations. I think
> >priorities had something to do with this.
> >
> >Didn't the USSR sell cars to Latin America?
> >
> >Chris Doss
> >The Russia Journal

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