1 - The compatibility of planning and market reconsidered

Summary

When this topic for the congress panel was proposed in 1987 I perceived it as a suggestion to reconsider the matter in connection with a new stage of economic reforms in the communist-ruled part of the world: a new stage both in terms of depth and width of the change – the first aspect represented by the clear radicalization of the reform concepts in such countries as Hungary and Poland, the second by the spread of reforms to the former primates of orthodoxy, in the first instance the Soviet Union. Yet, despite the significance of the new stage, it seemed that it was still the reformist context within which the problem was to be confronted. Now we find ourselves in a situation when the question is increasingly one not of reforming a socialist planned economy but of replacing it with a fully-fledged market system with ownership relations freely adjustable to secure its appropriate functioning (i.e. including predominance of private ownership of means of production should this prove to be the requirement). Some of the supporters of such a replacement refrain from calling the transformed system ‘capitalist’ (‘such as in the developed industrial countries’ is one of the preferred designations, sometimes coupled with declarations of the obsolescence of any sharp distinction between capitalism and socialism), and there is still strong adherence to the reform syndrome in the USSR, not to mention China.