Risk and the Socialist Economic System

J. Wilczynski
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J. Wilczynski: Royal Military College of Australia

Chapter 3 in Profit, Risk and Incentives under Socialist Economic Planning, 1973, pp 50-80 from Palgrave Macmillan

Abstract: Abstract Risk is a condition where there is a possibility of the occurrence of loss as a result of a deviation from the intended or expected situation. In economics, a distinction is made between ‘measurable’ and ‘unmeasurable’ risk. Measurable risk is that which can be estimated fairly accurately as it can be predicted on the basis of past experience and the law of large numbers. As such, this risk is insurable because its probability of occurrence is known, so that the insurance liability and consequently the insurance premiums can be calculated. This type of risk is associated with weather, fire, accidents, illness, theft and the like.

Keywords: Economic Reform; Socialist Enterprise; Central Planning; Socialist Economy; Socialist Country (search for similar items in EconPapers)
Date: 1973
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-01442-2_3

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DOI: 10.1007/978-1-349-01442-2_3

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