IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-4039-1434-7_9.html
   My bibliography  Save this book chapter

The Socialist Planned Economy: The Price System Eliminated

In: The Distorted Economy

Author

Listed:
  • Hans C. Blomqvist
  • Mats Lundahl

Abstract

All earlier chapters have rested on the assumption that prices are formed by the interplay of supply and demand in the world market. The distortions we have scrutinized so far modify the functioning of the market but do not eliminate the price system as such. There is another way of allocating resources in an economy, however: with the aid of administrative processes where planning plays a decisive role. The planning system may function in different ways in practice. Here we will concentrate on looking into the effects of the ‘purest’ variety, the type of planned economy applied in the Soviet Union and a number of Eastern and Central European countries until the early 1990s. In this system there was, in principle, no place for the market at all, even if reality never quite lived up to that ideal. (In several Eastern European countries fragments of a private sector survived. Moreover, illegal, black markets were a reality in all planned economies). Now we know, however, that the system functioned badly and finally it crumbled completely, so that today only North Korea and Cuba remain as orthodox planned economies. From what we know it seems highly unlikely that the planned economy could ever return as an economic system. In this chapter we will show how this type of economy functions and why the experiment of economic planning was unsuccessful.

Suggested Citation

  • Hans C. Blomqvist & Mats Lundahl, 2002. "The Socialist Planned Economy: The Price System Eliminated," Palgrave Macmillan Books, in: The Distorted Economy, chapter 9, pages 147-163, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-4039-1434-7_9
    DOI: 10.1057/9781403914347_9
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-4039-1434-7_9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.