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Soviet Economics: Critique of Soviet economic reforms; 1965-1989

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  • Soviet Economics: Critique of Soviet economic reforms; 1965-1989

    What will follow is a thorough analysis on the Soviet economy between 1965-1989. It seeks to contrast the Soviet economy that of Stalin's age and that of the Breznhev era, and also to dispell the myth that the Soviet economy(of the Breznhev age) was actually really "planned" in any sense of the word.

    Since it is long, I will only provide a link. Highly recommended for those interested in the topic.

  • #2
    I'll be posting in this thread A LOT.
    urgh.NSFW

    Comment


    • #3
      Here's an exerpt:

      Contemporary Soviet propagandists claim than Stalin "denied the operation of the law of value in a socialist economy":

      "It is well known that the operation of the law of value in the socialist economy was generally denied for a long time with the blessing of Stalin".
      (L. Gatovsky: "The Role of Profit in a Socialist Economy", in: "Kommunist" (Communist), No. 18, 1962, in: M.E. Sharpe (Ed.): "Planning, Profit and Incentives in the USSR", Volume 1; New York: 1966; p. 95).

      This claim is untrue. Stalin is on record as saying:
      "It is sometimes asked whether the law of value exists and operates in our country, under the socialist system.
      Yes, it does exist and does operate. Wherever commodities and commodity production exist, there the law of value must also exist".

      (J.V. Stalin: "Economic Problems of Socialism in the USSR"; Moscow; 1952; p. 23).

      What, in fact, these propagandists mean by saying that Stalin "denied the operation of the law of value" under socialism is that, during the period when a socialist society existed in the Soviet Union, the price of a commodity was often fixed by the state at a radically different level from its value:
      "At that time the approach to price itself was voluntaristic. Price was artificially divorced from its objective basis -- value",
      (L. Gatovsky: ibid.; p. 95).

      or, in other words, the operation of the law of value was strictly limited:
      "The law of value exercises its influence on production.....But.. the sphere of operation of the law of value under our economic system is strictly limited and placed within definite bounds".
      (J.V. Stalin: ibid.; p. 23, 25).

      Under the socialist system which formerly existed in the Soviet Union, the prices of commodities were fixed at all levels by the state. In fixing the price of a commodity, its value was taken into account, but the actual price was determined in accordance with the state's assessment of social requirements. Thus, over a considerable period the price of vodka was fixed above its value in order to discourage its consumption; on the other hand, the price of clothing was fixed below its value in order to assist the working people to buy more clothes. As a result of this price-fixing policy, enterprises in the vodka industry made an above-average rate of profit, while enterprises in the clothing industry made a below-average rate of profit. But since virtually all the profits of all industries accrued to the state and not to the individual enterprises, this was of book-keeping significance only.
      As in the case of production assets, the rate of profit made by an enterprise -- defined since the "economic reform" as "the supreme criterion of the efficiency of an enterprise" -- could become a reality and function as the regulator of social production only if this "voluntaristic" method of fixing prices was abolished and prices were brought into line with values.

      In the propaganda campaign preceding and associated with the "economic reform", therefore, the demand was put forward that the prices of commodities should be brought as closely as possible into line with their values, i.e., with the amount of socially necessary labour necessary for their production.
      I'm off.

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      • #4

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        • #5
          My main criticism is that there was always a lack of bananas in the entire eastern block.

          I experienced it first hand in eastern Germany before 91

          Blah

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          • #6
            The Virgin Lands campaigns was one of the worst land reform ideas ever.
            "Everything for the State, nothing against the State, nothing outside the State" - Benito Mussolini

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            • #7
              While the semi-ignorance of the law of value would be a problem in a capitalistic economy, it is not that much of a problem in a socialistic economy :
              The "law of value" (i.e fixing price according to the production costs), like every price fixing, is a tool to redistribute wealth among individuals and businesses. But in the USSR, such a tool was useless, since the State was already redistributing wealth.

              IMHO, the real problem of the socialistic economy doesn't come from these "masked prices". It comes from a dire absence of honest feedback, and honest criticism of the production processes. The workers were not directly interested in raising production, and hence were not encourage to design better production processes; those who designed production processes were office people (modern Japanese industrial process grants much importance to the opinion of workers when it comes to efficiency).
              Besides, since the economy was mostly planned from Moscow, the increase of efficiency in the production process needed to take the route of a complicated and conservative bureaucracy, which ended up killing all economical creativity.
              "I have been reading up on the universe and have come to the conclusion that the universe is a good thing." -- Dissident
              "I never had the need to have a boner." -- Dissident
              "I have never cut off my penis when I was upset over a girl." -- Dis

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              • #8

                IMHO, the real problem of the socialistic economy doesn't come from these "masked prices". It comes from a dire absence of honest feedback, and honest criticism of the production processes. The workers were not directly interested in raising production, and hence were not encourage to design better production processes; those who designed production processes were office people (modern Japanese industrial process grants much importance to the opinion of workers when it comes to efficiency).
                Besides, since the economy was mostly planned from Moscow, the increase of efficiency in the production process needed to take the route of a complicated and conservative bureaucracy, which ended up killing all economical creativity.

                So true. My father was a sailor, and later a dispatcher in the Soviet merchant fleet. he had many ideas but had to get permission from moscow to apply them.

                Lack of feedback, quality control, and the lack of a stimulus to innovate. In Stalin's days it was accomplished by fear of death. In capitalism it is accomplished by a fear of losing one's job. In post Stalin Soviet union, it wasn't accomplished at all. I prefer the capitalist way.
                urgh.NSFW

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                • #9
                  Lack of feedback, quality control, and the lack of a stimulus to innovate. In Stalin's days it was accomplished by fear of death. In capitalism it is accomplished by a fear of losing one's job. In post Stalin Soviet union, it wasn't accomplished at all. I prefer the capitalist way
                  so if the Soviets had of adopted TQM then the iron curtain wouldn't have fallen? interesting, but it does make sense

                  though communism problems still seems to come down to this, the state limits just how much one can achieve, and that takes away the motivation to achieve anything

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                  • #10
                    Originally posted by Spiffor
                    While the semi-ignorance of the law of value would be a problem in a capitalistic economy, it is not that much of a problem in a socialistic economy :
                    The "law of value" (i.e fixing price according to the production costs), like every price fixing, is a tool to redistribute wealth among individuals and businesses. But in the USSR, such a tool was useless, since the State was already redistributing wealth.

                    While this was certainly true of Stalin's USSR, this no longer held true for Khruschev's and Breznhev's reforms. While under both, the State still fixed prices and in addition, fixed wages, ultimately, the decision lay in the hands of the director of the individual enterprise!
                    The director could scrutinize and reform any "directives" handed down by the State, in order for his enterprise to continue making a PROFIT. Wages and prices were adjusted, accordingly. In addition, under Khruschev and Breznhev, the director was given a new power over the workers, that of firing.


                    IMHO, the real problem of the socialistic economy doesn't come from these "masked prices". It comes from a dire absence of honest feedback, and honest criticism of the production processes.

                    This certainly isn't true of Stalin's time. In Stalin's USSR, there were many inspection teams assigned to check quotas and production. Most notable would be the Stakhanovites, which would be the "elite" group, who not only checked production, but helped workers to improve the efficiency and quality of production, as well boosting morale.

                    To add to that, the NKVD had special organs assigned to it, which answered to workers' complaints, criticism, amongst other things such as 'wrecking' or sabotage.

                    However, under Khruschev and Breznhev, all criticisms and complaints went to the director of the enterprise and it was his responsibility to adhere to them. Needless to say, they didn't see this as in their best interests.



                    The workers were not directly interested in raising production, and hence were not encourage to design better production processes; those who designed production processes were office people (modern Japanese industrial process grants much importance to the opinion of workers when it comes to efficiency).

                    The workers had plenty of interest to raise production level, at least in Stalin's USSR. Under the socialist system in operation in Stalin's Soviet Union, workers' wages were based, in all spheres where this was practicable, on piece-work in accordance with the principle of socialism that a worker's remuneration should be proportional to the quantitiy and quality of the work performed. Under Khruschev's and Breznhev's system, however, the wages were time-based and increased only depending on the profitability of the given enterprise.

                    Besides, since the economy was mostly planned from Moscow, the increase of efficiency in the production process needed to take the route of a complicated and conservative bureaucracy, which ended up killing all economical creativity.

                    I have touched upon this already, but just to further clarify; in Stalin's system, GOSPLAN received numerous data from inspection teams, workers, managers, etc. on what they thought would need improvement in their respective workplaces. They acted on this data. However, in Breznhev's system, it was now in the director's hands as to whether he wanted to improve the quality and efficiency of production, to raise his enterprise's PROFITS.

                    BTW, just an interesting tidbit to note: According to modern economical statistics, under Stalin, the USSR's economy increased annualy at a pace of 9%-12%, yet under Khruschev and Breznhev, growth rates fell to 6% and then to 1-2% respectively.

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                    • #11
                      Blah blah blah blah.....The Soviet Union is great and the US sucks....blah blah blah blah.

                      That is essentially all Comrade will say in this thread
                      Eventis is the only refuge of the spammer. Join us now.
                      Long live teh paranoia smiley!

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                      • #12
                        Originally posted by Tassadar5000
                        Blah blah blah blah.....The Soviet Union is great and the US sucks....blah blah blah blah.

                        That is essentially all Comrade will say in this thread
                        Sounds like something only you would say. I personally the US.

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                        • #13
                          Originally posted by Propaganda


                          Sounds like something only you would say. I personally the US.
                          Says the one who supports Stalin!

                          Eventis is the only refuge of the spammer. Join us now.
                          Long live teh paranoia smiley!

                          Comment


                          • #14
                            Originally posted by Tassadar5000
                            Blah blah blah blah.....The Soviet Union is great and the US sucks....blah blah blah blah.

                            That is essentially all Comrade will say in this thread
                            Comrade Tribune posted to this thread?



                            I get it! You're CT's DL!!!! (or the other way around). That sure would explain a lot of things.

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                            • #15
                              Originally posted by Tassadar5000


                              Says the one who supports Stalin!

                              Damn right I do.

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