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How russia and china became Command economies?
11-19-2012, 02:49 AM
Post: #1
How russia and china became Command economies?
I am writing a report on how russia and china became free market economies, but must first understand how they became or tried to stay a command economy.

so do you have any sites that i could use to help me find this information?
yes i mean planned economy

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11-19-2012, 02:57 AM
Post: #2
 
The primary feature of the political economy since the fall of the absolute monarchies and the onset of the industrial revolution has been the conflict between the primacy of labor and that of private capital.

Liberal Democracies resolved this issue by retaining the primacy of private capital but compromised with the demands of labor by regulating business activities, enacting progressive taxes, allowing commoners to vote, and granting workers rights, old age and disability pensions and universal healthcare.

In Russia and China, the aristocracy would not compromise with labor and in the resulting conflict, labor achieved predominance through the forcible confiscation of private capital and its replacement with collective ownership.

In private capital based economies, decisions are made by aristocracies composed of millions of competing business and corporate interests. This competition is diverse, resulting in forces that are creative and destructive, efficient and inefficient, benevolent and evil. Liberal Democracies moderate the inevitable disasterous business cycles with regulations, protective tariffs, control of the money supply, selective state ownership and assistance to businesses and individuals in the form of direct subsidies, tax credits and unemployment insurance.

Planned economies such as those in Russia and China did not have inherent business cycles because they put all their eggs into a single basket. So rather than having decision-making diffused, you had one monolithic agency (i.e. GOSPLAN) make them all. To the extent that they made good decisions, these economies prospered and literally moved from feudalism to the space-age in the span of less than a century, far surpassing the progress of market-based economies. But to the extent that they made bad decisions, they had shortages causing people to starve and revolt en masse, leading to the renunciation of communism in Eastern Europe and gradual de-collectivization in China.

So as Western Democracies became more Socialistic, Eastern Europe and China have become more Capitalistic. The result is a blending into the present International Free-market Economic system in which corporate financing has achieved primacy and the degree of fiscal and monetary planning, business regulation and social democracy varies by country.

This system is continually evolving, so we cannot predict whether the ultimate economic fate of mankind will be closer to that predicted by Marx or by Malthus.

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