Structural integration of Baltic economies into the Soviet system

Structural design is a basic instrument of economic strategy in Soviet society. The strategic functions of resource allocation and income distribution which in the capitalist economy, (at least in its theoretical model) is performed by the competitive market mechanism, are divided between the central planning system and the organizational hierarchies which are endowed with exclusive monopolistic powers to implement the plans. In sharp contrast to the Western economic theory, the Marxist-Leninist view relegates the market mechanism to an insignificant peripheral role. In standard textbook version, the market mechanism is said to be replaced by central planning in the Soviet economy. This is an erroneous oversimplification. Competition in a free market takes place in terms of actual transactions: real goods and services change hands; the resultant redistributions are accomplished facts. Central planning, on the other hand, only provides the objectives and rules for the redistributions, but it lacks the capacity to carry out any real transactions; the actual capacity to carry out economic activities rests in the enterprises, i.e. the operational structure of the economic system. In much of Western literature the silent assumptions seem to be made that the activities of the enterprise structure form a perfect reflection of the . If ideal conditions existed and perfection was attainable, Soviet enterprise activities would indeed by synonymous with central plans. However since Soviet reality like our own is very far from the economic theoretical ideals, significant differences exist between plans and enterprise activities. Moreover, Soviet authorities not only recognize these differences, they also actually plan for them to meet various non-plannable goals, such as unpredictable local conditions and political readjustments in the economic structure. This paper will focus upon a recently introduced structural model: the multirepublic enterprise, which appears to have strategic consequences upon the

Business · Competition (biology · Economic system · Economics · Economy · Market economy · Market mechanism · Monopolistic competition · Monopoly · Planned economy · Economic Theory and Institutions · Post-Communist Economic and Political Transition · Russia and Soviet political economy

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