Economic Reforms in the Soviet Union and Eastern Europe by Jan Adam

By Jan Adam

The writer discusses the conventional method of administration of the financial system because it existed within the early Fifties within the USSR and is going directly to care for the reforms of the Sixties and of the Nineteen Eighties, kingdom through state. He exhibits that the point of interest of the reforms is on discovering a formal blend of making plans and the industry mechanism, and their good fortune may be judged by way of their skill to unravel acute financial difficulties.

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Additional info for Economic Reforms in the Soviet Union and Eastern Europe since the 1960s

Example text

In the Soviet Union, this is the area where the reform went the furthest. In the Soviet Union, Poland and Hungary a special incentive fund was established and it was not only fed from but also, and this was a 36 Economic Re/orms 0/ the 1960s novelty, determined by profit (in the USSR only to a degree), whereas in Czechoslovakia there was no special incentive fund in most enterprises (enterprises were given the right to determine whether the wage bill would be used for wages or for bonuses). In employment regulation the difference between the Soviet reform and that of the other three countries was not so large as one would expect.

The logic of the system of success indicators is that their number necessarily grows. Their large number impedes the initiative of enterprises with negative consequences for innovation. In every system, especially a centrally planned economy, rational prices are needed in order to be able to make rational economic calculations which are crucial for an optimal allocation of resources. Prices, wh ich are determined by the authorities and reflect to a great degree their preferences and which, in addition, lack flexibility, and on top of this price circuits, each of which can move independently of others, obviously cannot fulfil such a role.

First, the Hungarian reform was ins ti tu ted from above without considerable press ure from below, and therefore the leaders' room for manoeuvering was quite extensive. Second, in the post-revolutionary period after 1956 a climate of liberalisation set in. One ofthe most hated men of 1956, Jcinos Kcidcir, who allied hirnself with the Soviets against the revolution, was the architect of this liberalisation. Kcidcir has proved to be a very shrewd politician. Understanding weil the psyche of a nation under siege, he knew what was necessary in order to be forgiven and to gain the trust of the Hungarians.

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