Yeah, I know Gershenkron.
I also have a Russian military watch, this one dating from WWII, that is essentially a pocket watch with lugs and a strap attached. It was built on an 1880=90ss US model by the First Moscow Watch Factory (there was also a Second MWF), established around 1932 or so by an Ohio watch manufuacturer who, seeing that things were not good here and spying an opportunity for foreign markets, took his whole factory, lock, stock, and barrel, the workers too, to the USSR with, I think, a subsidy from the Soviets; set up in Moscow, and the US workers trained Soviet workers to make these watches. I have seen the same model manufactured up to as late as 1958, when they would have been worn by MiG pilots. It keeps OK, not great time, and is huge and loud. It's a cool item, but in terms of dissemination of innovation, backwards.
Just an anecdote, but I think a representative one.
It is true that the Soviets and other ex-Bloc and state socialist produced a number of high grade items of various sorts. In WWII, Russian tanks and small arms beat the Germans' products hollow. Wasn't a Wehrmacht soldier on the Eastern Front who wouldn't trade his Luger for a Nagant revolver. Russian optics were world class. The Russians of course very rapidly replicated nuclear weapons technology, if that's dissemination. They had top flight people like Kapitsa and Sakharov working for them as well as the two inestimable advantages of knowing (i) taht it could be done at all, and (ii) thanks to Klaus Fuchs and his pals, having, essentially, the pland, more important, the information about what wouldn't work.
But as Doug and Carrol as said, the debate is rather academic.
What is relevant and important is the question of hwo we can plan capital markets in failing capitalist economies.
Meanwhile I still think we should give the free market economists and the big execs short shrift. People know what that means, right? Instead of getting the whole religious hullabaloo before they pushed you off the ladder or pulled the wagon out from under your feet at Tyburn, rope around your neck, the priest would say something to the effect of, God Bless You My Errant Son, Bye. Next!
--- On Thu, 3/5/09, Wojtek Sokolowski <swsokolowski at yahoo.com> wrote:
> From: Wojtek Sokolowski <swsokolowski at yahoo.com>
> Subject: Re: [lbo-talk] IT innovation and "the Markets"
> To: lbo-talk at lbo-talk.org
> Date: Thursday, March 5, 2009, 3:08 PM
> ----- Original Message ----
> From: andie nachgeborenen
> <andie_nachgeborenen at yahoo.com>
>
> Three problems seem to have faced central planners in this
> area in this are -- here I rely on the analyses of former or
> then current central planners and analysts in the FSU and
> the ex-block, like Kornai, Brus, Lange himself, the
>
> [WS:] This precisely the problem of this kind of analysis
> and the conclusions built on it - they use wrong units of
> analysis (states instead of smaller institutional units) and
> end up comparing apples and oranges. A better way would be
> to compare instittutional units of the same or similar
> kinds, e.g. firms to firms, governments to governments.
>
> On the government-to government level of comparison, two
> observations are in order. In both, centrally planned and
> market countries, governments played similar roles as major
> engines of innovation, and both were pretty good in that
> role. Sputnik is a prime example. So we need to
> analytically separate the government effect in both types of
> countries to be able to discern the difference, if any, in
> the propensity to innovate between market and centrally
> planned systems.
>
> The second distinction that need to be made is that between
> actual invention and dissemination of that invention. The
> argument put forth by economic historians like Gerschenkron
> is that centrally planned economies were extremely good at
> innovation dissemination - in fact central planning itself
> was the adaptation of organziational inventions made
> elsewhere (be it GErman cartels, or Fordist "scientific
> management.") And it makes intuitive sense, a
> centrally controlled system is far more conducive for
> innovation dissemination than a looselu coupled market
> system. This is at least what transaction cost economists
> argue.
>
> Only after making those distinctions we can concentrate on
> comparing propensity toward innovation among firms in the
> planned vs. market environments. I cannot cite any
> empirical comparisons of that kind of the to of my head, but
> I have read arguments that management of firms under central
> planning had to show high degree of innovativeness to be
> able to overcome numerous snags that existed in their
> instituional environment. In any case, this is anecdotal.
>
> In sum, I would refrain from making sweeping
> generalizations about "market" and "centrally
> planned" countries becaouse they confound very
> different realities under the convenient buut misleading
> labels.
>
> An one more comment - innovation is not necessarily what
> wins competition or for that matter wars. The American
> Civil war is a good example. The South's generals far
> more innvative as far as tactict is concerned than their
> Northern counterparts (who tended to be dull bureaucrats.)
> But the despite their brilliance they lost the war,
> succumbing to attrition by materially superior North. So
> the outcome of a conflict is not necessarily a good
> indicator of how brilliant and innovative any particular
> side was.
>
> Wojtek
>
>
>
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