Collapse Mechanism of the Socialist Economic System

Masahiro Taguchi

Ekonomia journal, 2011, vol. 26

Abstract: This article presents the model of functioning of the socialist economic system based on empirical analysis of the Polish reforms. In Poland, there were several trials to carry out economic reforms, but always after a few years they were stopped. Therefore I will examine why the reforms failed, and why the system reforms ultimately stalled in deadlock.

I focused on the basic architecture of the “traditional” system, the cyclical nature of the structural reform of the socialist political determinants of economic reforms, interoperability and interactivity between platform and mechanism of its functioning. According to the analysis, even if the mechanism of functioning of the economic system will be improved, but will not be matched to the basic architecture, sooner or later, the operation mechanism will operate imperfectly, and it will return to the originalmechanism functioning at the level of the basic architecture of the traditional system. This rigid platform creates the periodicity of the economic reform. Thus, the system does not function efficiently if the platform is replaced. However, the basic architecture of the platform is the ideological foundation of the socialist system as well and bringing it to change is the negation of socialism. These are the fundamental limitations of the economic reforms in the socialist system.

This lack of flexibility led to the collapse of the system and inevitably leads to the system transformation.

Date: 2011
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