Socialist Planning Quotes

“In the present author’s opinion, the three fundamental factors which explain why the Marxist aspiration for a non-market planned national economy cannot be realised efficiently are partial ignorance, inadequate techniques for data processing and complexity.”
― Michael Ellman, Socialist Planning

“In more advanced countries, such as the Czech Republic and Estonia, state socialism led to a steadily increasing lag behind neighbouring countries such as Austria and Finland.”
― Michael Ellman, Socialist Planning

“Socialist planners perceived the environment as something to be tamed and mastered, and adapted to human needs. They did not see that it was a resource which needed to be cared for and cherished, and that human survival depended on its proper treatment.”
― Michael Ellman, Socialist Planning

“The mistake the Bolsheviks made was not in aiming at the modernisation of Russia. That was entirely sensible. Nor was it a mistake to ascribe a major role in the economy to the state. This is quite normal in the modern world. Their mistake was to suppose that successful modernisation required the elimination of the market and of private enterprise. They did not realise the role that the market and private enterprise can play in generating and maintaining self-sustaining economic growth. Looking at all economic activity as if it were a zero-sum game was very one-sided. Furthermore, the Bolsheviks failed to realise that for the state to attempt to micromanage every farm, factory and office is a very inefficient form of management, that wastes information and potential local initiatives and entrepreneurship. Furthermore, coercion tends, in general, to be less effective than market incentives in raising labour productivity, and to be indifferent to human suffering and loss of life (see Chapters 6 and 7).”
― Michael Ellman, Socialist Planning

“Although not the only motivating force in an economy, material incentives are important, and attempts to abolish them are likely to have an adverse effect on labour productivity.”
― Michael Ellman, Socialist Planning

“By the ‘second economy’ is usually understood that part of the economy resulting from private production and/or (re)distribution. Attempts were sometimes made to abolish it (e.g. the USSR in 1918–21 and 1930; China in 1958–9 and the Cultural Revolution; and Kampuchea in the late 1970s). The results of such attempts were always very adverse for popular welfare, and were always ultimately abandoned. Even when parts of this sector (e.g. the private plots of collective farmers) were legalised, other parts often remained criminalised. The extent of criminalisation varied over time and between countries. The long-run tendency was to reduce the area of criminalisation. The second economy provided goods, services and income for the population which the state sector was unable, or unwilling, to provide.”
― Michael Ellman, Socialist Planning

“In a system of imperative planning, the main job of the enterprises is to carry out orders from above. It is for this that they are judged. Whether or not the output meets the wishes of consumers is a matter of indifference for the enterprises. Hence, under the traditional model there was often a substantial gulf between the volume of output and its usefulness.”
― Michael Ellman, Socialist Planning

“A very important feature of the traditional model was its adverse effect on personal consumption. Aspects of this were:

– Widespread shortages and queues. The long time devoted to shopping, the intermittent supply of basic consumer goods and the long waiting lists for durables such as housing and cars were notorious features of the traditional model;
– A very limited assortment of goods and services, with many imported goods and some very important services, such as repairs to housing and consumer durables, being almost unavailable in the legal economy;
– Poor quality and availability of food products;
– Poor quality of manufactured consumer goods;
– Slow introduction of new consumer goods.”
― Michael Ellman, Socialist Planning

“According to Marxist–Leninist doctrine, the survival of money and financial flows in a socialist planned economy was something of an anomaly which would in due course disappear. Stalin assumed that in the higher phase of communism, when collective ownership would have disappeared and state ownership would have become universal, goods would circulate on the basis of direct product exchange (i.e. physical exchange without the intermediation of money).”
― Michael Ellman, Socialist Planning

“Prices in the traditional model were quite inappropriate as guides to the efficient allocation of resources, and were (generally) not used as such. This resulted from the state determination of all prices at infrequent intervals; the fact that enterprise activities were supposed to be determined by the plan they received from above; the rationing of producer goods; and the fact that prices were fixed on a cost-plus basis.”
― Michael Ellman, Socialist Planning

“The role of money in the Soviet economy was limited by the fact that many consumer goods (housing, public transport, education, medical care) were basically allocated (or heavily subsidised) rather than sold at market prices. (Rents, fares and charges for medicines did exist, but they were relatively insignificant.) Because of this, and because of the fact that producer goods were rationed, money in the traditional model was not a universal medium of exchange. There were many things it could not buy.”
― Michael Ellman, Socialist Planning

“The characteristic feature of the ‘planned economy’ in the traditional model was that economic activity proceeded in accordance with instructions from above.”
― Michael Ellman, Socialist Planning

“The dictatorship has important economic consequences. For one thing, it makes disasters more likely. Because feedback is suppressed by censorship and repression, it is much easier than would otherwise be the case to pursue policies which have disastrous consequences, such as the collectivisation of agriculture. Even when these policies lead to famine, the extent of the famine can be hidden by censorship and control over the movement of people. The leadership has an interest in hiding the extent of the famine so as not to undermine the image of the Glittering Future towards which the Party is supposedly leading society. It is not an accident that the worst famines of the twentieth century were in China and the USSR.”
― Michael Ellman, Socialist Planning

“The political system in which the traditional model is embedded is a dictatorship, that is, a system in which the ruling group impose their will on society, and deal with opposition (real and imaginary) by repression (i.e. arrest, deportation, imprisonment, execution). This dictatorship was originally known as the ‘dictatorship of the proletariat’. This formula expressed the idea that it was a dictatorship of the proletariat, by the proletariat, for the proletariat. Although the formula ‘dictatorship of the proletariat’ was abandoned in the USSR under Khrushchev, along with the Stalinist terror which it had been used to legitimate, it was retained elsewhere. For example, in China it is still orthodox. A ‘people’s democratic dictatorship’ is the officially favoured description of the political system in China, but in essence this is the same as the ‘dictatorship of the proletariat’.”
― Michael Ellman, Socialist Planning

“The class struggle which, according to Marxists is one of the fundamental contradictions of capitalism, is ultimately based, according to Marxism, on the division of society between the owners of the means of production and the proletarians who do not own the means of production, and have to sell their labour power to the capitalists. In order to overcome this contradiction, Marxists advocate the socialisation of the means of production. In the traditional model, socialisation is identified primarily with state ownership.”
― Michael Ellman, Socialist Planning

“From a Marxist–Leninist point of view, the frittering away of resources in capitalist countries (e.g. in activities such as advertising, trading in financial assets, lengthy and expensive legal proceedings, etc.) and their failure to mobilise many of the resources available (unemployment, low participation rates, unused production capacity) contrast adversely with the high mobilisation of resources in the traditional model.”
― Michael Ellman, Socialist Planning

“In the traditional model, the dominant form of ownership is state ownership. The state owns the land and all other natural resources and all the enterprises and their productive assets. Collective ownership (e.g. the property of collective farms) also exists, but plays a subsidiary role, and is expected to be temporary. In due course, it is expected to be transformed into the higher form of state ownership.”
― Michael Ellman, Socialist Planning

“The present author regards the main features of the traditional model as:

1. state ownership of the means of production;
2. political dictatorship;
3. a mono-hierarchical system;
4. imperative planning;
5. a subordinate role for money, profit, prices and banks.”
― Michael Ellman, Socialist Planning

“Marx and Engels were right to argue that an unregulated market economy was socially undesirable, but wrong to assume that the replacement of the market by planning would lead to an attractive economic and social system.”
― Michael Ellman, Socialist Planning

“The idea of national economic planning has been deeply discredited. The collapse of the state-socialist system in Eastern Europe and the USSR gave rise to a mood of capitalist triumphalism, which lasted only ten years, and was undermined by the difficulties of ‘transition’, the behaviour of the world capital market, the inequality and unemployment in the capitalist countries, and the depressions in some of them.”
― Michael Ellman, Socialist Planning

“However, not all countries that rejected socialist planning made a complete system-switch. Some of them (e.g. China and Vietnam) retained the political dictatorship and developed an economic system which combined a largely market economy and strategic integration into the world economy with a dominant state role in the economy.”
― Michael Ellman, Socialist Planning

“System change in Eastern Europe and the FSU turned out to be a painful process marked by inflation, unemployment, inequality, criminalisation and state collapse (in some countries). Nevertheless, it brought some concrete benefits (full shops, freedom of all kinds – from religious to travel).”
― Michael Ellman, Socialist Planning

“The socialist planning system had a number of important achievements to its credit. It introduced mass production into Soviet industry. It greatly increased the output of a number of key industrial sectors, such as oil and steel. It produced the huge number of weapons necessary to emerge victorious from World War II. It provided full employment. It produced the world’s first earth satellite. It invested heavily in human capital. Its educational system (except in the social sciences) was good by international standards, and produced large numbers of qualified people. During the 1950s the USSR enjoyed a golden age with growth rates much in excess of those in the USA or UK. However, socialist planning also had a number of problems. These included: shortages of consumer goods; inability to take full advantage of the world market for goods, capital and people; slow home-grown technical progress; and living standards that lagged behind those in capitalist countries. In addition, the high growth rates of the 1950s gradually declined.”
― Michael Ellman, Socialist Planning

“This orientation of socialist planning to the building up of military might is one of the reasons why the USSR, unlike Japan, failed to catch up with the leading capitalist countries in the civilian sector of the economy. Military programmes were a burden on the economy.”
― Michael Ellman, Socialist Planning

“There were three reasons why socialist planning was not adopted by the advanced countries. First, in those countries capitalism led to a huge and historically unprecedented increase in real wages, a development not foreseen by Marx or the Communist parties. Secondly, the advanced countries were not backward countries struggling to catch up. Thirdly, the experience of socialist planning – although it had some important achievements to its credit – did not demonstrate a clear superiority over capitalism. Indeed, in some respects it demonstrated a clear inferiority with respect to capitalism.”
― Michael Ellman, Socialist Planning

“The fact that the state-socialist countries were backward countries desperate to catch up partly explains why it is that, instead of executing the legacy of Marx, i.e. of constructing an egalitarian, non-market society with a truly human organisation of the labour process and an end to the division of labour and the exploitation of man by man, they were actually mainly concerned with executing the legacy of Peter the Great, the Meiji Restoration and Feng Guifen.”
― Michael Ellman, Socialist Planning

“Having come to power committed to replacing the market by planning, the Bolsheviks rapidly realised that they had no concrete ideas of how to do this.”
― Michael Ellman, Socialist Planning

“Marx devoted most of his life to the analysis of capitalism and was notoriously opposed to attempts to design utopias. Nevertheless, from his scattered observations about socialism, and from those of his close comrade Engels (for example, in Anti-Dühring and Karl Marx) his followers drew the idea that in a socialist economy the market mechanism would be replaced by economic planning.”
― Michael Ellman, Socialist Planning