The Soviet Union and the Command Economy Communism and the Market - “From each according to his ability to each according to his means” - There was no market - The problem with capitalism is private ownership, so communist leaders thought that if there is no private ownership (collectivism instead), all the problems would be solved. - Marx thought the evils of capitalism were perpetrated by private property and the market. - If under communism there is no private property, then the market doesn’t exist either. - With no private property, no one can buy and sell anything because everything is already owned by everyone. And if you can’t buy and sell there is no market! - You cannot buy something that you already own, the end of private ownership must necessarily mean the end of the market. - But how many resources should go into the making of motor cars? How many into fish? These questions still need to be addressed even with a communist market. - In capitalism, it is determined by the market itself, done through the movement of prices (price signals) which in turn reflects the movement of supply and demand schedules. - But, under communism, there is no market so it is the state itself that makes the decisions with bureautic procedures that determines how much should go into the different sectors - command economy. - Centralized authority commands how economic resources should be used. Russian Revolution - Assassination of the Czar and his entire f ...
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