.. moderately each year and safely meet, but not noticeably exceed, their assigned production assignments: In other words, they ratcheted up production one notch each year. (Dyker, 1992, P26) In a similar fashion, centrally assigned production goals discouraged Soviet management from developing or employing technological innovations. (Dyker, 1992, P29) The excessive emphasis on central planning discouraged both managerial and technological innovation, as a consequence of this emphasis on steady mediocrity, and an excessive emphasis on centrally assigned production goals, a style of management that encouraged complacency and consistency at the expense of productivity and innovation developed. Under state socialism the economy is subject to rigid control from a central planning agency. This permits the concentration of effort on specific sectors of the economy and the Soviet Union repeatedly demonstrated and ability to make significant production advances in targeted sectors of the economy.
However, the innumerable negative aspects of state socialism counteract these positive aspects. In the case of the Soviet Union illustrative, if not comprehensive, examples of these problems have been demonstrated in the body of this essay. Agricultural collectivisation during the 1930s was only accomplished at the cost of extensive coercion and violence. In the years after the Second World War significant productivity gains were made in heavy industry, but they were only achieved at the expense of neglect of the consumer sector and deplorable agricultural productivity. Thus, throughout the state socialist period of Russian history the civilian population constantly suffered from a low standard of living and shortages of consumer goods.
More importantly, the emphasis on central planning that was apparent in the economy was manifest in other aspects of life in a totalitarian and repressive government. Therefore, under state socialism Soviet citizens suffered from material shortages and political repression. These shortcomings of the system outweigh any industrial and manufacturing advances that the system generated. USA, The market economy: In contrast to centralization, state ownership of the means of production, and centrally planned production and distribution, capitalism relies on private ownership and individual initiative in the marketplace for production and distribution. In general terms, capitalism s advocates argue that individuals pursue their own best interests, in economic terms efficiency, and that this mutual pursuit of individual interest (the free market) encourages innovation and improvement. In the USSR production and distribution was driven from the centre, under capitalism production and distribution is seen as the aggregate outcome of individual autonomy and activity.
In a similar fashion, free market societies are generally liberal democracies. The analogy is presented that the free market in economics is equivalent to the free market of ideas and policies that is liberal democracy. Underlying this approach to economic (and political) organization is the assertion that all individuals possess certain equal rights to vote, to work, to move and that this creates a level playing field in the free market and electoral politics. A centralized economy attempts to design and enforce an equitable system of distribution while capitalism asserts that equitable distribution will ensue if all individuals compete on a level playing field. Unfortunately, as was the case with a centralized economy, reliance on the free market results in both successes and failures. The successes that capitalism rightly lays claim to relate to innovation.
Competition does encourage innovation, and capitalism has produced well over a century of dizzying technical progress. At the same time productivity has also increased at a phenomenal rate. These technological developments can, in large part, be linked to the competitive environment of the free market. However, the failures of capitalism are evident in North American society also. In a city as affluent as Toronto, a city with a global reputation for quality of life, homelessness is a constant and squeegee kids are just a new element in the milieu.
In the United States the inner cities have become hyper-segregated urban battlegrounds while gated communities proliferate. This handful of examples suffices to illustrate hat North American capitalism has done a less than perfect job of distribution. Under capitalism, as Frank Cunningham points out, freedom does not include freedom from poverty and rights do not include such simple material factors as shelter and employment. (Cunningham, 1977, P97) More importantly, these anecdotal illustrations point to structural imbalances in capitalism; imbalances that make free market and the level playing field myths. People are born with neither equal opportunities nor equal abilities: Therefore, they enter the playing field at different levels.
The son of a Multi-Million Corporation vice-president, attending Harvard and living in Beverly Hills has different opportunities than the daughter of a landed immigrant from Poland who drives a taxi in LA. It is ludicrous to suggest that the two have equal opportunities or compete on a level playing field. In fact, these two individuals would largely live in separate worlds because of their differing economic circumstances. For the former the government would be represented by Revenue, for the latter it would be Community and Social Services. While both might see the Metro police as a symbol of government it would not be unreasonable to presume that they had had different experiences with them.
Most importantly, their lifestyles from diet to leisure would be completely different largely as a result of their economic status. The free market and the level playing field enhance the status quo by insuring that the wealthy can use their wealthy to preserve their position and aid their children s careers. At the same time they condemn the poor to their place by insisting they enter the free market bereft of resources economic, educational and political. Politics in capitalist affairs merit a brief aside. In politics, as in economics, the possession of wealth and capital translates into influence. A newspaper publisher has a larger forum than a plumber and a lobbyist who donated thousands of dollars has more influence than an injured worker appealing a WCB decision.
In a democracy, one-man one-vote does not translate into a level playing field because economic factors influence one s political influence if not one s voting rights. Capitalist societies rely on the marketplace to regulate the distribution of goods. While this encourages competition and innovation among manufactures it also encourages competition among consumers and labors and results in massive imbalances in distribution. In cities throughout North America the homeless sleep within meters of mansions and exclusive condominiums. The marketplace possesses no inherent morality.
In fact, in its worship of competition it is amoral. On the other hand, the Soviet experience clearly demonstrated that state socialism and a centralized economy can be mishandled. Perhaps it is human nature, not political organization that lies at the root of inequality in both North America and Eastern Europe. Bibliography Bibliography Aghion, Philippe and Olivier Blanchard and Robin Burgess, The Behavior of State Firms in Eastern Europe, Pre-Privatization European Economic Review 38: 1994, pp1327-1349. Belozertsev, Alexander and Jerry W Markham, Commodity Exchanges and the Privatization of the Agricultural Sector in the Commonwealth of Independent States Needed Steps in Creating a Market Economy Law and Contemporary Problems 55: (4), Aut 1992, pp119-155 Cunningham, Frank Understanding Marxism Progress Books Toronto: 1977. Dyker, David Restructuring the Soviet Economy Routledge New York: 1992 Nove, Alec An Economic History of the USSR, 1917-1991 3rd Ed Penguin Books, London: 1992 Lane, David Soviet Society under Perestroike Routledge London: 1992 Yarolavsky, E Landmarks in the Life of Stalin Lawrence & Wishart Ltd London: 1942 Economics Essays.