At the apex of the socialist pyramid of command was Gosplan, which defined the target rate of growth of the economy, the ratio between military and civilian outputs, between heavy and light industry, or among various regions. Gosplan's directives were transmitted to ministries of industrial and regional planning, and then to particular factories, power centres, and collective farms. A completed plan was negotiated, and passed into law.
The plan defined all units of national output, as well as the order and technologies by which those were to be produced. In theory such a plan could provide a good basis for a working economy. But in reality there was a vast and widening gap between theory and practice.
The number one problem was that the plan specified outputs in physical terms, and managers maximized tonnages of output, not its quality. So, low-quality Soviet products lost competition to better products from abroad which the «black market» offered, while the home warehouses and stores were stuffed with homemade goods. Secondly, the economic flow became increasingly clogged and clotted due to the fact that planners in Moscow could not efficiently for see all the situations of the on-site production in the provinces or elsewhere. But the real danger of socialism was that of a bureaucratization of economic life. A capitalist firm responds to challenges offered by the economy by changing prices and innovating because failure to do so will cause it to lose money.
A socialist ministry ignores these challenges because bureaucrats learn that doing something is more likely to get them in trouble than doing nothing, unless doing nothing results in absolute disaster.
Absolute economic disaster was reached in the Soviet Union and its Eastern former satellites, which made President Mikhail Gorbachev announce his intention to reconstruct the economy from top to bottom by introducing the market, reestablishing private ownership, and opening the system to free economic interchange with the West. Seventy years of socialism had come to an end.
Слова и выражения:
abort – прерывать (обыч. беременность)
apex – вершина, макушка
architect – архитектор
bureaucrat – бюрократ
bureaucratization – бюро – кратизация
centrally – централизованно
challenge