ZDROJE NEBO PODNĚTY RŮSTU?

Oldrich Kyn ()

MPRA Paper from University Library of Munich, Germany

Abstract: This article was published in the Czech Journal “Plánované hospodářství” in 1967. This was the time of rapid changes both in the Czechoslovak economic and political theory as well as in actual economic and political systems that culminated in the “Prague Spring” of 1968. These changes were preceded and in the considerable degree also stimulated by the completely unexpected economic recession of the first half of 1960’s. The economy that was by Marxist theory and Communist propaganda supposed to grow in the fast, uninterrupted and well balanced way suddenly stopped growing and in one year even slightly declined. There appeared two conflicting views about the way out from the recession. The orthodox Marxists and especially the planners from the Central Planning Office argued that the only way out is by significant increase of investment that would generate additional productive capacity. Some even argued that because the technical progress is capital intensive, the uninterrupted growth requires permanently increasing share of investment in the National Income. The opposite view saw the solution in the abolition of the Soviet-type command planning and return to the market economic system. This paper uses theories of economic growth and references to the empirical studies that unquestionably demonstrated the mostly capital-saving nature of technological progress in the 20th century, to show, that the further increases of already very high share of investment in National income is not necessary and would be in fact harmful. The further slowing down of the growth of per capita consumption that would be necessary if the first strategy was adopted would undermine the incentives for increasing the labor productivity and for choice of capital-saving technologies.

Keywords: Socialism; Central Planning; Czechoslovak Economic Reform; Prague Spring; Recession; Rate of Growth; Share of Investment; Capital-Output Coefficient; Technical Progress; Capital-Saving Technology; Incentives; National Income; Consumption; Investment (search for similar items in EconPapers)
JEL-codes: O4 P2 (search for similar items in EconPapers)
Date: 1967
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Published in Plánované hospodářství, No. 4..Vol. X(1967): pp. 70-80

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