A gazdaságosság jelentőségéről és szerepéről a népgazdaság tervszerű irányításában[The importance and role of efficiency in planned direction of the people s economy]

It became clear as the planned economy developed in Hungary in the first half of the 1950s that qualitative indices of enterprise activity cannot be improved by central command. Too many detailed regulations precludes the accomplishment of all. Nor is there time to verify their results. Excessive regulation casts doubt on the personal responsibility of heads of state-owned enterprises, leaving a mere appearance of it. Any radical change requires a new approach in many fields: directives must be issued only on important matters (for instance, apply to specific goals), financial incentives be linked to efficiency indices, not quantitative ones, buyers be so placed that their evaluations reverberate onto the financial situation of seller enterprises, prices reflect the quality of products, the directors and entire collectives of enterprises share to an appropriate extent in the profits obtained. In essence these tasks require efficiency, instead of quantitative indices, to be at the centre of economic activity.