Soviet Restructuring in Relation to the Chinese Reform

Michael Kaser

Chapter 6 in Economic Reforms in the Socialist World, 1989, pp 97-107 from Palgrave Macmillan

Abstract: Abstract In the early 1950s all states with a ruling Communist Party had adopted a homogeneous economic mechanism — that of the USSR. The Soviet ‘command economy’ had been constructed within a very short space of time — the single year 1930 embraces most of the essential changes — and responded to the political dictates of centralised authority. That authority was constituted by Stalin himself and it can be argued that, having assured political autocracy, he would not tolerate the persistence of economic forces which might gainsay him or undertake activities contrary to those embodied in a central plan. The forcible collectivisation of the peasantry and the elimination of private small-scale industry and trade removed from the economy all those whose performance was geared to the domestic market. Soon afterwards, the same exclusion was applied to those who responded to changes in foreign markets: by 1938 a deliberate policy of self-sufficiency had reduced exports to a mere half per cent of Soviet GNP (Holzman, 1963, p. 290). The political imperative did not render such exclusive centralisation irrational for economic development, for it could be contended that all resources were thereby mobilised to achieve a few crucial outputs, such as the expansion of capacity for engineering in order to provide capital equipment and defence goods, and for that new capacity to be supplied by energy, steel and other inputs and housing, food and clothing for the workers. Such concentration of economic activities on a narrow set of objectives was later characterised by a famous Polish economist as ‘sui generis a war economy’ (Lange, 1961, p. 139).

Keywords: Realistic Exchange Rate; Economic Reform; Wholesale Price; Chinese Communist Party; Central Committee (search for similar items in EconPapers)
Date: 1989
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DOI: 10.1007/978-1-349-10668-4_7

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