The Planned Economies of Eastern Europe

The Planned Economies of Eastern Europe

The Planned Economies of Eastern Europe

The Planned Economies of Eastern Europe

Excerpt

Following a period of impressive industrial growth, combined with low rates of open inflation and unemployment, the performance of the East European economies in the 1980s is a cause of considerable concern. Throughout Eastern Europe industrial growth has declined to the point where the prospect of zero (or even negative) growth has arisen. In all countries substantial increases in retail prices have been announced while the volume of household money savings has approached (or reached) the equivalent of a year's turnover in state retail stores; the level of indebtedness to the West exceeds safe limits for many countries; investment in CMEA (Council for Mutual Economic Assistance) projects to develop energy and raw material sources situated in the USSR is putting immediate strains on current consumption levels; reports of labour unrest, consumer dissatisfaction, black market activity, petty and large-scale corruption frequently reach the West; and the need to allocate labour more efficiently may give rise to frictional unemployment. Although the underlying problems are common to each of the East European countries their scale varies considerably.

The purpose of this book is to examine the adaptation of the Soviet planning system to East European circumstances, paying particular attention to the problems of economic relations with the USSR and the problems of foreign trade, the constraints to domestic policies established by relations with the USSR and the problems of domestic consumer equilibrium.

It is hoped that the book will be of some value to readers with a general interest in Eastern Europe, readers with an interest in economic systems and readers with a knowledge of the Soviet system wishing to extend that knowledge to Eastern Europe. I have, however, assumed no prior knowledge of the Soviet economic system and each section contains a brief outline of the original conceptions of Soviet economists in the 1920s, the development of the system in the USSR and its subsequent application in Eastern Europe. I have tried to simplify the economic analysis for the benefit of non-economists (although some of the theoretical sections are somewhat technical) and readers wishing greater technical detail may pursue the references in the text and the bibliography.

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