The aim of this book is to bring together, from various sources, statistics and general information on Czechoslovakia's economy during the first decade of comprehensive central planning, 1948 to 1958, and to make comparisons with economic developments in highly industrial Western countries as well as in less industrial Eastern European countries. There are two reasons for undertaking such a study:
1. Czechoslovakia provides, for the first time in history, a test case of the efficacy of central planning at a very high stage of industrialization. (In the only other highly industrial Eastern European country, East Germany, the economic system has not been pushed so far toward comprehensive central planning, and the economy has been exposed to extraordinary influences which make an international comparison difficult.) Therefore, Czechoslovak economic development may be of special interest in view of the competition between the two basic economic systems of our times: the "market economy," which, although it may differ from country to country in the extent of state intervention and in the extent of private and public ownership, is based mainly on the interaction of demand, supply, and price on the market; and the "centrally planned economy," under which all means of production (with the exception of rapidly diminishing private land) are owned by the state or by state-sponsored bodies, and most market functions have been replaced by decisions of the central planning authorities.
When comprehensive central planning, based on radical nationalization of industry, transportation, banking, and trade, was introduced in 1948, Czechoslovakia already had a level of output and consumption similar to that prevailing in Western Europe. This similarity in starting levels makes a comparison of both economic systems more valid than, for example, a comparison between the United States and the USSR.1
The distinction between "centrally planned economies" and "market economies" is, of course, an oversimplification. The difference between Czechoslovakia and Western countries lies not only in this contrast but in the whole social system. Even from a purely economic point of view, it is necessary to qualify the Czechoslovak system as a centrally planned____________________