Re: Re: why the ussr crashed

[Ken Hanly <khanly@xxxxxxxxxxxxxxx>]

You do not take into account the fact that criticism and opposition to plan
faults was severely curtailed by the dominance of the communist party bureaucrats
in planning. There was no social corrective mechanism As Jim and others have
mentioned this is hardly the type of democratic and decentralised planning with
considerable citizen input that most of us who support planning envisage.
    By the way are there to be entrepreneurs under market socialism? Unless they
have control of capital they own and risk that how can they do anything but play
at being entrepreneurs as von Mises claims?
And if they do have control of capital  how is it different from capitalism
except for a larger public sector, safety net, etc.?
   Cheers, Ken Hanly

JKSCHW@xxxxxxx wrote:

> In a message dated 7/22/00 12:22:55 AM Eastern Daylight Time,
> michael@xxxxxxxxxxxxxxxxx writes:
>
> << I disagree with Justin that the USSR crashed because of poor planning.
>
>  Please Justin, let us drop it.  You and I disagree.  Neither of us will be
>  easily convinced by their other. >>
>
> * * *
>
> This isn't me. It's someone who disagrees with me.  Therefore, a comment
> addressed to me for repetitive harping is inappropriate.
>
> Moreover, I didn't say the USSR "crashed" because of poor planning. I have
> argued (see Socialist Register 1991), and still believe, that if we ask why
> the USSR finally crashed, that is, suffered a final economic collapse and
> political disintegration, it is because the perestroichiki, Gorbachev chief
> among them, consciously and deliberately dismantled the planning system
> without developing and implenting any adequate replacement. They were under
> the false impression, possible derived from bourgeois advisers like sachs,
> that markets grow automatically and naturally, without any requirement soif
> social and legal supporting and resytrianing institutions. That of course was
> nonsense, and in the context, fatal.
>
> The defects of planning played a role in the story, though. The Soviet
> economy had been deteriorating for decades. It has entered a serious enough
> crisis that the leadership thought radical reform--perestroika--was called
> for. Moreover, the doubts were widespread enough to gather, initially,
> widespread enough support for an increasingly radical program of reform, that
> ere led to the results I have discussed. How bad the situation really was is
> open to debate. Some thing that the USSR was just suffering the normal
> slowdown after rapid (re)development after the war; some think that there was
> a real crisis. I don't think we have enough data to say at this point.
>
> My own belief is that whichever was true, had the planning system been left
> in place and not dismantled, the USSR would still exist and would continue to
> limp along into the foreseeable future. I do not think that the crisis,
> however bad it was, that lead to the introduction of perestroika, was
> terminal. It was the "cure" that was fatal.
>
> All that said, the evidence of the USSR is that at its absolutely best, and
> certainly in its normal operations, the planning system suffered from the
> problems that you would expect from the calculation arguments: bad
> information, perverse incentives, systematic lying, bhittlenecks, sdhortages,
> stifled innovation. Anyone familiar with the planning literature can report
> that these problems, and "Hayekian" complaints and explanations, were
> absolutely familiar to Soviet planners and managers, even though most of
> these had never heard of Hayek, Austrian economics, or any such things. They
> just describedtheir own experience and frustrations, and tried, with greater
> or lesseer, mainly lesser, success to get around these problems. The problems
> were never as catastrophic as Hayek expected.
>
> The USSR had a functioning economy that was operating at "second world"
> rather than "third world" levels. But there was no question, after 1965,
> about the USSR "overtaking and surpassing" the US, a  had been hoped (there)
> or feared (here) during the rapid growth of the later Stalin and Krushchev
> years. On the contrary, the USSR was falling behind and stuck in a
> permanantly second-rank position. That is what I mean by the failure of
> planning and the vindication, at least partially, of the Hayekian arguments
> about calculation.
>
> It is possible to argue, as Charles does, that the very low but quite
> widespraed social welfare net that the USSR provided most iof its citizens,
> combined with the possibility of indefinite survival at this low level of
> arguably greater equity, means that Soviet planning was really a success
> comparedto the advanced capitalsit west, or anyway to the US, which produces
> great wealth but also great poverty, and is poor on equity.
>
> Apart from the response that social democractic countries in Europe are far
> better on equity, the main thing about this reply is that is is a dramatic
> concession, a tremendous reduction in socialist goals. Raher than wealth and
> freedom for all, socialism on this view offers on a minimal hedge against
> absolute poverty. That would npt be nothing; indeed, for many in the third
> world, it is far more than they can hpope for from capitalist markets. That
> is part of the reason socialism has been popular in the third world. But is a
> far cry from what Marxists and other socialsits have claimed for the planning
> as an overall superior method of allocating economic resources than markets
> or a mixed economy.
>
> --jks