Market, Plan & State: The Strengths and Weaknesses of the Two World Economic Systems

Market, Plan & State: The Strengths and Weaknesses of the Two World Economic Systems

Market, Plan & State: The Strengths and Weaknesses of the Two World Economic Systems

Market, Plan & State: The Strengths and Weaknesses of the Two World Economic Systems

Excerpt

The present study, I feel, has been long overdue. For quite some time, the market economies have been searching for a role that planning might play in their economic management. At the same time, the planned economies have been trying, in many disparate ways, to fit market mechanisms into their centrally managed systems. New developments within both economic worlds lend renewed urgency to the analysis of their convergence and divergence.

Crisis phenomena in both world systems are discussed in the first chapter of this work. In the market economies the specificity of these developments in the era of the new revolution in science and technology consists in ever longer periods of recession, accompanied by ever greater technological unemployment that cannot be justified by the low growth rate only, and an uneven course of adjustment to the worldwide market competition induced by the great industrial powers. The systemic weakness of the planned economies, namely deficient mechanisms for economic steering, geared toward autarky, results in these countries' backwardness in economic competition with the developed industrial countries, as a direct consequence of low productivity and poor quality of production.

The second chapter compares economic and social structural changes in the West, in the East, and in the Third World, and considers the moving forces of social evolution, productivity, and work ethics as well as the economic potential of the three world regions. The effects of the new revolution in science and technology are contrasted with the effects of the socialist revolution.

Chapters three through six confront conservative and liberal theory with practice in the East and in the West. Recent reform experiments in traditionally conservative Soviet economic management, particularly since the accession of the more dynamic Gorbachev leadership, and broad modifications of the economic model in reform-oriented Hungary are analyzed. In the industrialized countries of the West, a tendency toward state intervention is gaining. In this context, an investigation is also made of the economic and social effects of nationalization in several industrialized countries of the West, particularly in Austria, France, and Great Britain. Finally, the seventh chapter analyzes the interdependence between crisis phenomena in the economy and ideology.

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