Taxation,money, and credit,in a liberalizing socialist economy

Understanding the system of financial control in the pre-existing régime of ‘classical’ socialism is a key to understanding what might go wrong in the transition. Accordingly, this paper proceeds in four steps by examining:

1. how domestic fiscal and monetary processes complement central planning in the classical socialist economy;
2. why this mechanism for securing domestic financial control under classical socialism tends to break down naturally into inflation when decentralization begins and central planning though direct materials balancing is weakened;
3. how, in a more deliberate transition, domestic tax and monetary arrangements might be better managed to keep the price level stable as prices of individual goods and services are freed; and
4. how, in moving toward free foreign trade, explicit policies governing tariffs and foreign exchange convertibility could best parallel and complement the evolving restraints on money and credit in domestic commerce.

In effect, moves to dismantle the apparatus of central planning, decontrol prices, privatize property, and so on need to be supported by a proper sequence of fiscal, monetary and foreign exchange measures-as analyzed more fully in the author's new bookThe Order of Economic Liberalization. In this short essay, a summary outline of such a financial order is provided.     

Investment limit cycles in a socialist economy

The present paper generalizes a linear cycle model of the socialist economy studied in Simonovits (1990): the two equations describing the reproduction of the tensions are retained, while the two linear reaction equations are confined to the interval of lower and upper bounds; outside these intervals the decisions are given by the corresponding bounds (cf. Hicks, 1950). The main result is the following: If a certain linear system of equations and inequalities has a solution, then there exists a limit cycle with period 4, the amplitude of which is independent of the initial states.     

Growth,control and tensions in an open socialist economy

Persistent contradictions among growth, efficiency and equilibrium in East European countries are analysed in our theoretical model. Internal and external tensions are distinguished. Both types of tension diminish the efficiency of investment and of foreign trade, moreover, they modify macrodistributional shares. Competing growth strategies are compared achieving constant internal and/or external tensions. A simple numberical macromodel is constructed to be used in computer simulations.     

Savings and retail price reform in a queue-rationed economy

The paper addresses the effect on consumer saving behavior of queue rationing and of price reform in a Soviet-type economy in a lifecycle framework with overlapping generations. It is shown that consumers save less for retirement in a queue-rationed exchange economy with black markets than they would in a free-market system with the same endowments. The expectation of price reform is thus likely to cause an increase in consumer savings. In addition, an analysis is given of the effect of the increase in controlled prices on the black market prices and on the prices of unrationed goods.     

Toward a political economy of post-Fordist punishment

This article suggests some new lines of research in the field of the political economy of punishment and some possible new directions for a critical approach to contemporary social control strategies. The starting point is the transition from a Fordist economy to what can be defined as a post-Fordist system of production. I outline some tendencies in the actual capitalist dynamic (concerning the labour market, the production process, the relations between the workforce and capitalist power and between work and social citizenship), suggesting that a renewed political economy of social control has to deal with them. Two tendencies are assumed to be structural. On the one hand, the tendency of the capitalist system to make the production (and extraction) of surplus-value more and more independent of the effective working time (a tendency toward the reduction of human labour in the productive process). On the other hand, the tendency towards the massive introduction of new technologies: a tendency whose main consequences seem to be the intellectualisation of human labour and the decline of the classic distinction between manual and intellectual labour. I assume that these tendencies give rise to a new productive subject (the multitude), whose characters exceed the actual organisation of work and deepen the contradictions intrinsic to post-Fordist societies. Hence, an analysis of some new social control strategies follows, where I consider actuarialism as a technology for the control of these contradictions

The Chinese mafia: private protection in a socialist market economy

Gambetta's theoretical framework focuses on two important aspects directly relating to the birth and development of mafias, namely a demand for private protection and a supply of the same. In the Post-Mao era, China started its transition from a centrally controlled economy to a market-directed economy by adopting reform and opening-up policies. The widespread creation of property rights has exponentially enlarged the demand for protection. However, property rights are ambiguously defined in the Chinese legal system, and the state is unable and unwilling to provide efficient and sufficient law enforcement mechanisms for needy people because of the rampant corruption of government officials and the weak judicial system. In this case, the mafia that is interested in the private provision of protection developed into an alternative enforcement mechanism for ‘securing’ property rights in China's economic transition. The most important service offered by the mafia in China is not only to assist business enterprises in monopolising the market, but also to assist local government in China's economic reform.     

The transition from central planning to a market economy: A computable general equilibrium model

This paper develops a computable general equilibrium (CGE) model of the transition from a central planned economy to a market economy. The model is an extension of Wellisz and Findlay's (1986) model of the Soviet ‘second economy.’ By distinguishing alternative assumptions about the disposition of the government budget, two model variants — the ‘activist’ and ‘non-activist’ — are analyzed. Equilibria of these model variants are computed for various parameter specifications of the Kantorovich ray, which represents the stringency of central planners' direction of the economy. The paper shows that increasing efficiency of the private sector, while it reduces the size of government subsidies to the state sector, does not necessarily increase the net government budget.     

Reflections on the legal features of the socialist market economy in China

China’s socialist market economy is a market economy co-existing with a large public sector of the economy, affected by the State as a policymaker, a regulator and an important actor along with private ones; general interests in principle prevail over individual ones. A major role of the law is of providing the tools for administrative leadership and efficient macro-control. Legal and policy documents concur in indicating a model for the developing Chinese legal system: not as Western-style “rule of law” (r.o.l.); more and better socialist laws; effective supervision at all levels; intense macro-control over private economy; more efficient, law-abiding administration and legal institutions. The governing authorities are at different levels, according to the size/impact of each specific business, and each of them has or may have a say beyond the law, so implementing full macro- and micro-control on the market at various levels, through a substantial number of “policy checks” at appropriate junctions or in blank areas of the law. Differentiated “modes” of the law could be the results of a coordinated absorption within the socialist frame of values, mechanisms, norms, formants hailing from different sources.     

Toward a strategic-repositioning model for defense and aerospace contractors

This paper discusses progress in developing a strategic-positioning model for defense and aerospace contractors in the post-Cold War era. Going beyond traditional concepts of technology transfer, defense conversion, and corporate diversification, strategic repositioning is concerned with the entire set of organizational transformations required to successfully focus the firm's core competencies onto other economic sectors. It is a process of looking at all of the firm's capabilities, resources, and aspirations in a completely new light. Construction of the strategic-positioning model, now in progress, involves three stages: 1) conceptualizing the process, 2) formulating a theory of strategic repositioning through exploratory discussions with defense contractors at various stages of the process, and 3) constructing a strategic- repositioning decision-support tool for defense firms undertaking the process. This paper reports the results of the second stage, the exploratory discussions. Surprisingly, technology was of the least concern to the contractors. Rather than the technology itself, contractors were concerned about the different expectations of non-DOD markets regarding such ancillary technology issues as quality, reliability, maintainability, and the degree of technological standardization. Of greatest concern was the nature of the organization, particularly the contractor's corporate culture and how well it would fit with non- DOD markets.     

论中国特色社会主义事业总体布局的实践进路、战略谋划与推进路径

中国特色社会主义事业总体布局的提出，表明了我们党对发展中国特色社会主义的认识进一步深化。在实践进路上．中国特色社会主义事业总体布局实现了从二位一体、三位一体到四住一体的深刻转变；在战略谋划上，中国特色社会主义事业总体布局与全面建设小康社会全局、构建社会主义和谐社会大局的相辅相承；在推进路径上，中国特色社会主义事业总体布局与中国特色社会主义理论体系和党的建设新的伟大工程良性互动。     

正确理解、全面推进社会主义新农村建设问题探究

社会主义新农村建设是一个全新的概念,是一项惠及广大人民群众的系统工程,也是我国"十一五"规划中的重点内容之一。本文着重探讨了实施这项工程的重要意义、如何理解其基本内涵、当前农村面临的主要问题以及全面推进这项工程建设的基本做法。     

Transition accounting for India in a multi-sector dynamic general equilibrium model

Using a quantitative methodology designed specifically for emerging economies, we measure the components of India’s economic growth over the period 1960–2005. Our approach accounts for time-varying parameters, transitional dynamics and non-linear trends. We find that increased productivity in the service sector, facilitated by a structural shift toward services, is the principal driver of India’s economic growth. Our measures also suggest that the allocation of inputs across sectors has not improved over this period, and in the case of labor appears to have significantly worsened. We further find that fluctuations in output around its trend are due primarily to fluctuations in sector-specific total factor productivity, with fluctuations in labor market distortions and labor taxes also playing important roles. In the period 1960–1980, productivity fluctuations in the agricultural sector are the dominant source of cycles. Since then, productivity fluctuations in the manufacturing and service sectors have been more important.