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Liberman's Rules of the Game for Soviet Industry

Published online by Cambridge University Press:  27 January 2017

Alfred Zauberman
Alfred Zauberman*
Affiliation:
London School of Economics and Political Science
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Abstract

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Type
Notes and Comment
Information
Slavic Review , Volume 22 , Issue 4 , December 1963 , pp. 734 - 744
Copyright
Copyright © Association for Slavic, East European, and Eurasian Studies. 1963

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References

1 For the exposition of Liberman's proposals see in particular , NO. 8, 1962, and , Sept. 9, 1962; also a summary of his views in , Nov. 10, 1962. See also A. Nove, “The Liberman Proposals,” Survey, Apr., 1963.

2 (Moscow, 1962), p. 522.

3 Especially in the clothing and printing industries.

4 See on this, (Moscow, 1961).

5 See, inter alia, my “The Soviet and Polish Quest for a Criterion of Investment Efficiency“ in Economica, Aug., 1962, and literature referred to therein.

6 (Moscow, 1962), p. 66.

7 , No. 3, 1963, p. 27.

8 For a recent systematic presentation of its stand see in particular , No. 4, 1963.

9 At present the rate would be about 20 per cent; see op. cit., p. 92.

10 The reader may be usefully addressed for rigorous proof to Robert Dorfman, Paul Samuelson, and Robert Solow, Linear Programming and Economic Analysis (New York and London, 1958), especially pp. 366 ff. and 404 ff.

11 , Sept. 21, 1962; op. cit.

12 See Montias, J. M., The Evolution of the Czech Economic Model, 1949-1961 (mimeographed; New Haven, 1962).Google Scholar

13 For proof see Dorfman, Samuelson, and Solow, loc. cit.

14 See A. BaiypHH in No. 1, 1962, and No. 11, 1961.

15 Of the growing Western literature on the subject see, inter alia, my “Soviet Debate on the Law of Value and Price Formation” in Value and Plan, ed. Gregory Grossman (Berkeley and Los Angeles, 1960); Gregory, Grossman, “Industrial Prices in the USSR, “ American Economic Review, Vol. XLIX, No. 2 (May, 1959)Google Scholar; Morris, Bornstein, “The Soviet Price System,” American Economic Revietv, Vol. LII, No. 1 (Mar., 1962)Google Scholar; also my “Principles and Methods of Price Formation of Producer Goods” in Probleme der Wirtschaftsplannung im sowjetischen Wirtschaftssystem, ed. K. C. Thalheim et al., to appear soon.

16 , No. 8, 1962, p. 111.

17 This would correspond to Marx's formula of price under competitive capitalism— Produktionspreis. Liberman explicitly dissociates himself from this postulate: “Relating profit to productive funds is only a way of measuring efficiency of production. This does not mean that the formula of the ‘price of production’ [Produktionspreis] must be necessarily adopted in price formation“; ibid., p. 106n.

18 (Moscow, 1960).

19 The problems are discussed by Robert W., Campbell, “Marx, Kantorovich, and Novozhilov: Stoimost’ versus Reality,” Slavic Review, Vol. XX, No. 3 (Oct., 1961)Google Scholar, and by me in “New Winds in Soviet Planning,” Soviet Studies, July, 1960, and in “Planification Mathématique, “ UU.R.S.S., Vol. II (Strasbourg), to appear soon.

20 Oct. 13, 1962; and , No. 11, 1962: “One cannot substitute an average profit rate of an enterprise for the role and power of state planning,” p. 97

21 Note the institutional and behavioristic framework within which the rule “maximize your profits” is being tested empirically in the Yugoslav case: competition between firms is encouraged, market is recognized as a self-correcting mechanism of optimal allocation; prices of most commodities are determined by supply and demand, but in this setup “the glowing importance of the market has progressively converted the federal plan into a forecast based on certain investment and other assumptions“; Albert, Waterston, Planning in Yugoslavia: Organization and Implementation (Baltimore, 1962), p. 40.Google Scholar

22 See reports from the session of the Academy's Scientific Council for Problems of Economic Accounting and Material Incentives in , Nos. 10 and 11, 1962, especially the concluding contribution by the council's chairman, Professor L. Gatovsky. Note that while the concept of profit as a single success indicator was rejected as incompatible with the socialist mode of production, the idea of a “tax” on capital stock was found to “deserve serious examination” (No. 11, p. 138).

23 For a discussion of this point see Lipińiski, Jan, “Prawidfowe ceny dla dostawc6w a liniowe funkcje kosztów,” Ekonomista (Warsaw), No. 2, 1963, pp. 256 ff.Google Scholar

24 In this context see an interesting discussion by Kornai, J. and Lipták, T., “A Mathematical Investigation of Some Economic Effects of Profit Sharing in Socialist Firms, “ Econometrica, Jan., 1962, especially p. 157 Google Scholar. Problems of an operational price structure within the framework of profit incentives for a model approaching Soviet-type economy are analyzed by Aleksy Wakar and Zielińiski, Janusz G., “Socialist Operational Price Systems, “ American Economic Review, Vol. LIII, No. 1 (Mar., 1963).Google Scholar

25 No. 10, 1956.

26 Sept. 21, 1962.

27 Liberman gives only a numerical example of his incentive model (elaborated for the machine-construction industry), see , No. 8, 1962, p. 106.

28 See op. cit., p. 100.

29 Since this article was written, I have acquainted myself with the article “What Price Economic Reforms?: Ills and Remedies,” by Harry G. Shaffer in Problems of Communism, May-June, 1963. It gives a valuable description o£ existing and proposed systems of incentives and procurement and supply procedures. The reader may also be usefully referred to sources quoted in that article.