“In capitalism, man exploits his fellow man. In communism, it’s the other way around.”
The goal was a “classless society”, and the existence of a middle class violated that. Especially an economic middle class, due to their Marxism-driven focus on economics as defining class. Notably they did have an upper class; the Party members were aristocrats in all but name. But they weren’t really richer, they just had more privileges.
Also, keep in mind the nature of true believers; it was dogma that Communism would make the nation wealthier, therefore it would make the nation wealthier and looking for solutions outside the confines of that ideology was a good way to get tossed in a gulag.
Note that China’s move towards a more market economy and greater prosperity didn’t happen until after Mao was gone and less fanatical people took over. Mao just enforced ideological purity and tried to force the ideology to work as advertised, no matter how many millions of people he had to kill failing to do so.
I also suspect the fact that USSR came to rely on market solutions in the form of a massive black market kept them from formally trying market solutions; the black marketeers wouldn’t have wanted that as it’d have cut into their profits, and they had a great deal of influence at all levels of society.
This sounds like the old leftist argument “oh but if only central economies chose to focus on…” The point is they don’t. Yes, most economies are mixed economies. And those economies are greatly influenced by what the government chooses to invest in and the policies they set.
The more centralized and more totalitarian an economy gets, the more it will command the economy to focus on building things to defend that economy. The free market allows the economy to invest in growing the economy through the incentive of making people wealthy.
I’m not sure that ideological communism can really be the cause, given that Russia is no longer officially communist, but they still have many of the same economic problems.
Which are different from corporate manager’s focus on KPIs and share prices how?
Every manager at every level relies on statistics about the performance of whatever they’re responsible for. Once it’s not you and your 4 crewmen in close personal contact doing [whatever], indirect statistics are all there is.
The problem is when the larger system encourages lying rather than performing. Rest assured there’s lots of lying going on in the staunchly capitalist USA today. And it didn’t start last year.
The leftists must have shuffled me out of the room when they argued this.
No, the point is that all types of governments choose what their economies focus on. China is the most famous example of a communist regime allowing some capitalist innovations, yet even a quick look at their policies in the last few decades will show that much of their “capitalism” is built around government funding and laws to encourage one segment, which can and has been quahed when the results don’t conform to expectations.
Singapore is another example of a quasi-authoritarian government (the People’s Action Party has controlled parliament since independence in 1959) enabling both the crazy rich and the average person with housing and land policies that cut both ways.
Japan is more democratic but uses stated government guidelines to steer their superbusinesses into the desired paths, or as the Britannica says, “the government’s control and influence over business is stronger and more pervasive than in most other countries with market economies.”
Government control is a continuous spectrum rather than a U curve of totalitarianism and free-market capitalism.
The difference is in most cases, the relatively immediate feedback of results will could cause an adjustment of what is measured and what adjustments to make. Whereas, for the reasons enumerated in posts above, trying to change the system in the USSR - including mundane changes like what the metrics and quotas focus on - is strongly discouraged. Nobody is rewarded for pointing out a flaw. Managers in free market economies sometimes actually are rewarded for changing focus to improve results. Financial feedback is a useful incentive.
(Although I’ve seen the opposite. One statistic noted where I used to work - there’s a statistical heirarchy, for every 100 minor incidents requiring a First Aid visit, there was likely to be one serious injury. Concentrate on reducing the number of minor incidents, and you will likely also reduce chances of that serious incident. So track incidents to see where things are not safe. Translated to the front lines? Bosses told their crews “don’t go to first aid unless it’s really urgent”.)
The thing to note about class, I suppose, is in turn of the century society, class was distinctive. Middle class may not have been like nobility with palaces and gold leaf everywhere, but they had decent sized houses, employed several servants (paid a small wage) and generally lived the good life. That many were merchants or small business owners, and made a living taking profit from the labour of others rather than all their own labour, obviously marked them as part of the problem for communists.
Another difference is that, in a capitalist economy, the metric of performance is usually money. While that obviously has some major limitations, it’s still a lot more flexible than, say, “number of shoes”: If a capitalist shoe factory makes too many child-sized shoes at the expense of adult shoes, then child shoes will drop in price and adult shoes will rise, providing the incentive for the factory to shift. Or if there’s an overabundance of shoes in general, the capitalist company might switch to making handbags, or tires, or smartphones.
And allowing valuable parts to be stolen.
A deeply corrupt dictatorship can have many of the same problems- both are indeed- dictatorships.
Consumers, a free press, and competition . If your product is crap, consumers will find out and stop buying it, they will switch to a competitors product. In communism, there is no free press and no competition.
It is more to do with government management and control, or lack thereof, over the economy than “communism” which is just a buzzword at this level, unless you mean something to do with actual industrial communes, which still need to produce something and may (or not, of course) be less corrupt..
Ok, But one might argue that China didn’t become more economically powerful until it started enacting more capitalist policies. And their leadership has wisely focused on economic expansion rather than military spending (at least compared to the USA or former Soviet Union).
Singapore is more of a “city state” with 6 million people, more comparable to London or NYC than a nation of hundreds of millions of people.
Japan was considered an economic miracle in the 80s. Since the 90s, their centralized policies have contributed long periods of stagflation and lack of growth.
I seemed to recall an issue some years back where China ended up creating huge “ghost cities” of thousands and thousands of unoccupied units. But not sure if they were ever occupied since.
It’s the same problem when the US or other Western economies pick and choose “winners”. They essentially become “too big to fail” and have to continue being propped up.
You have some valid points, but this part doesn’t make much sense.
Whay happens differently in a planned economy if there is less barley than planned? Less beer is produced. The price may not change, and beer will be sold out soon. Maybe a barley substitute is used.
I don’t see much of a difference.
I could put this another way: The average worker felt no need to exploit themselves more than necessary.
That’s just silly. Why must a centrally planned economy be planned a few dozen? Why can’t you have a structured planning committee where the top level decides on the greater issues and the lower levels do the detailed planning and reporting back to the upper levels?
I believe most large companies do something similar.
I won’t argue the exact numbers. The issue was comparing centralized economic planning with decentralized economic planning. I think it’s obvious that a centralized system means fewer people are involved in the decision making; that’s the reason you call it centralized rather than decentralized.
It doesn’t matter if you’re talking about a country or a corporation. Although in a free market system, the decentralization of the private economy is supposed to function through the separate actions of multiple companies, each with their own management.
One of the problems with a planned economy is the price of goods isn’t connected to consumer demand. When prices are too low it encourages behavior like overconsumption or hoarding whereas prices that are too high discourages use. What tended to happen in the Soviet Union, is people would buy more than they needed or even wanted when a product was available. No doubt a lot of goods purchased in this manner ended up on the black market.
As for using rice or some other substitute, where do you think that’s coming from? Any rice we produced this year was earmarked for something else. Planned economies aren’t good and pivoting to consumer demands.
I know you might be thinking we have various supply issues from time-to-time. It’s true. But the Soviet Union as a matter of routine could not provide their citizens with the goods they desired. They had to rely on a black market to help them do that.
It wasn’t just the average worker, it was pretty much everyone. There wasn’t much of an incentive even for managers to build a better product or improve efficiencies.
Not even argue- other than cheap junk, China needed that influx of capitalism to become a powerhouse.
The correspondent for the Toronto Globe & Mail recounted what happened when it started to rain in Soviet Moscow. Everyone pulls over, opens the glovebox, takes out their wipers, and puts them on. If you left the wipers on otherwise, they would be stolen. Consumer goods shortages.
My dad would tell the story from the 60’s when Made in Japan was a synonym for cheap plastic junk, he was laughed at when he told colleagues that some of their products were high quality. The same evolution of industry has happened in Taiwan, Korea, and China. It’s an evolutionary process as the industries learn to make better, more complex goods. By the late 80’s, Japan dominated audio electronics. Later in the 2000’s, Korea dominated flat screen technology and their auto sector rivals Japan… soon to be eclipsed by China’s EV production.
As I understand the Chinese model, the government encourages enterprises to develop certain technology. They will subsidize early research and production to multiple competing private enterprises to foster the same competition that produces results in free markets, but faster. Thus, one of the big names in EV’s is Huawei, who took advantage of the research money and had a decent technical grounding in (much smaller) battery tech.
The ghost cities were an interesting aspect to their economy. Chinese distrust banks apparently with good reason, as was recently demonstrated, not to mention apprehension about money being taken. So savings are invested, and nothing is more solid and physical than real estate. Developers realized this, and in cahoots with local officials created massive developments where many of the units were sold to the public as a second or third apartment as an form of savings. As usual with capitalism, they badly overproduced; and China is not noted as a big rental economy, so many of these buildings stood empty - not to mention the ones not finished when the market collapsed and the developers ran out of funds.
One analysis I recall reading years ago about Soviet arms development is that for military products - tanks, aircraft, etc. - they essentially did the same, pitting several companies (government owned, of course) to compete to develop and produce, much like the USA did, thus their arms tech was better than their consumer products. (Fun story from the Foxbat pilot - the brake fluid for Soviet fighter jets was pure ethanol. It was well-supplied, no shortages. When military wives complained about this, apparently one high-placed officer said “we will use whatever brake fluid we damn well want.”)
The version I know of I learned from the Paper Skies YouTube channel.
The narrator of the channel grew up in the Soviet Union, and his father was a fighter pilot. He has several interesting videos on Soviet aviation on his main channel, and he has the Comrade Kroupsky channel for general talk on Russia up to the end of the Soviet era. Almost all of them touch on corruption in that system and how it was perverse in different ways than the problems of capitalist systems.
Consumption of alcohol carried by aircraft and pilfered by the pilots and crew was so widespread that they had different slang for each type:
- “Landing Gear” Liquer: hydraulic fluid. About 20% alcohol, the balance being glycerin and water.
- Sooltyga: 30% alcohol, 70% water. Su-15 cooling fluid for the brakes due to its high landing speed.
- Shylo: 95.6% alcohol, 4.4% water. Used to cool the radar for the Su-15.
- Shpaga: 40% alcohol, 60% water. Used for cooling on the Tu-22 (nicknamed the “booze carrier”).
- Massandra: 50% alcohol, 50% water, used for cooling on the Mig-25, which also carried Shylo.
In general, it’s a mild form of corruption, but I do think it illustrates how widespread it was in Soviet society.
Another example are e-ink readers. Admittedly it’s a niche product, but China has worked on it. IMHO the best e-ink readers in the world are the Boox devices, which are made in China by a Chinese company. They have definitely moved past the “cheap junk” phase of manufacturing consumer goods.
As best as I can tell Russia has never had that kind of economy, even after the fall of the Soviet Union. Not even during the Yeltsin and early Putin years when they were in the “we’re no longer communist and not yet authoritarian” sweet spot that would seemingly enable that sort of economy.