Footnotes and references

* This essay is a revised version of the authors’ article: “notes on the Long-term Prognosis of Czechoslovak Economic Development” which appeared in Plánované hospodárstvi, No. 5/1966.

 

1

We comment especially on the essay of M. Soucek, J. Tauchman, Z. Vergner: “Preparation of a Long-term Prognosis of Czechoslovak Economic Development” Planovane hospodarstvi, No. 9 - 11/1965 and in abbreviated form in the Czechoslovak Economic Papers, No. 7.

 

2

 For instance in the well-known discussions between L. von Mises, F. A. Hayek, H. Dickinson, A. Lerner, O. Lange, and others.

 

3

These two ideas were discussed in connection with alienation of labor by Karl Marx in his Economic Philosophical Manuscripts. Marx stresses the point that 1) it is impossible to solve the second problem, i.e. humanization of society without first solving the problem of doing away with poverty and destitution, and 2) that the main aim is the second idea, i.e. the humanistic and democratic society. He makes therefore a distinction between a) crude (primitive) communism, which is really only a generalization and consummation of private ownership. “The power of material ownership with regard to it is so strong, that it wants to destroy everything that cannot belong to all as private property; it uses force to abstract from all talents, etc. Direct physical possession is its only goal in life and being... This kind of communism always negates the personality of man... and it is consummated only in envy and... in a desire to level off all distinctions.” (Karl Marx, Economic Philosophical Manuscripts, SNPL, Praha 1951, pages 90—91).

b)     “True communism is a positive liquidation of private ownership as a form of people’s alienation, and... an establishment of a real human existence of man and for man... This kind of communism is identical with humanism... it actually solves the discord between man and nature, it eliminates the contest between existence and essentiality, between objectivization and self-assertion, between freedom and pressure, between individual and race”. (Source: see foot-note a), pages 92—93).

 

4

Sometimes the term used is “general communist liberation of man”. See for example, Philosophy and Management (in Czech Filosofle a ,Rizeni), NPL 1965, by Jiri Hermach.

 

5

Very often the definition of “central planning” was understood as a completely centralized operative decision-making in economic affairs. Such an interpretation of “central planning” is quite evident in the already mentioned discussion: Mises, Hayek, Lange etc.

 

6

Jan Tinbergen uses the term “economic regime” ,“characterized by a number of institutions (each with their tasks, activities, procedures and methods)” — Central Planning, Yale University Press 1964, p. 81

 

7

Principles of the Accelerated Realization of the New System of Management, State Commission for Management and Organization, Praha, May 1966.

 

8

A similar formulation can be found in P. Samuelson (economics, Mc. Graw-Hill  1964, p. 15). According to Samuelson, problems of economic organization include three basic and mutually connected processes:

1) What commodities shall be produced and in what quantities?...

2) How shall goods be produced? That is, by whom and with what resources and in what technological manner are they to be produced?

3) For whom shall goods be produced?”, in other words problems of distribution and utilization.

 

9

Gunnar Myrdal, Beyond the Welfare State, Yale University Press, 1963, p. 7.

 

10

The role of “subject” in social development is discussed by Oliver Tenzer in his article “Filosofické problemy zakonitosti ekonomickych procesu” (‘Philosophical Problems of Economic Processes”), Politickd ekonomie, No. 8/1966. He stresses there the activity of subject “even toward natural laws”. Subject “makes laws to work in such a way as to give rise to new necessary processes”. Exactly the same thing is shown by our example of economic laws. In another place Tenzer writes “Objectivity of economic (as well as of all other social) laws does not rest... in their existing outside, and idependently of the subject. A subject, as an intelligently acting factor, is part of these laws.” This is the general characteristic. In our notes we endeavor to present a more detailed and perhaps also a quantifiable delineation of the share of the subject. We therefore emphasize the problem of many levels and complex structures of social evolution and laws.

 

11

By economic equilibrium we mean a state in which the supply of products and factors of production does not drop below demand, and in which all production activity is realized with a zero profit. (We are using here the terminology of the equilibrium theory. In the Marxist terminology this means average profit.) The existence of this equilibrium can be shown by a linear static model. See K. J. Arrow, G. Debreu, “Existence of an Equilibrium for a Competitive Economy.” Econometrica Vol. 22, 1954, p. 265—90. Keynes’ theory further shows that under suitable distribution of resources, it is possible in an equilibrium to make supply equal demand at least in the case of one production factor.

 

12

 R. Dorfman, P. A. Samuelson, R. M. Solow, Linear Programming and Economic Analysis, McGraw-Hill 1958, chapter 13 and 14.

 

13

A. Bergson, Socialist economics. Survey of Contemporary economics, Irwin 1948, page 414.

 

14

O. Lange, On the Economic Theory of Socialism, The University of Minnesota Press 1938.

 

15

"There exists not just one Pareto’s optimum, but there is a large number of them, and a choice between them is only possible if we have some social utility function.. .“ Jan Tinbergen, Economic Policy: Principles and Design, North Holland 1964, p. 33.

 

16

O. Lange, “The Foundations of Welfare economics”, Econometrica Vol. X/1942, pages 215/228.

 

17

E. S. Phelps in his book Fiscal Neutrality toward Economic Growth, McGraw-Hill, suggests the adoption of such a taxation system, which would not distort individual preferences for saving and investment, and which would lead the economy to the Pareto optimal rate of growth of individual consumption.

 

18

In France, for instance, in 1960, individual savings covered 48 % of net and 26 % of gross investment. In West Germany it was 56 % and 38 %, in Britain 44 % and 25 %, and in the U.S.A. 60 % and 26 %. Source: United Nations Yearbook 1961. In 1962 in Norway it was 33 % and 14 %. Source: Parliamentary Report No. l/1963—64. Moreover, we must take into account the fact that individual savings recorded by statistics, in capitalist countries are derived not only from income but also from profits of private contractors.

 

19

The existing economic conditions differ greatly from the assumptions underlying the model of Pareto’s optimum. We shall not concern ourselves with the many problems connected with it. We are convinced, however, that the central economic organ is able, to a large extent, to adjust existing distortions.

 

20

A society chooses unbalanced paths in case of war, or to accelerate industrialization. Albert O. Hirschman  in his book The Strategy of Economic Development recommends to developing countries a certain kind of unbalanced growth for the period of industrialization. The economic growth of Czechoslovakia was unbalanced during the last two decades, and the present plan of moving over to equilibrium can again be realized only by means of unbalanced path

 

21

We turn away from the problem of non-uniqueness discussed in special literature, see K. J. Arrow, Social Choice and Individual Values, John Willey, 1963.

 

22

The matter in question is the intertemporal efficiency, see Dorfman, Samuelson, Solow, quoted book, chap. 12.

 

23

See for instance Jaroslav Habr, A Contribution to the Theory of Sliding Plans. Essays in Honour of Michal Kalecici, PWN, Warszawa 1964

 

24

 Radovan Richta, “Dynamics of our Time and our Revolution” (,,Dynamika doby a nase revoluce”), Rude pravo, 27. 5. 1967 and R. Richta and Co., Civilizace ma rozcesti (Civilization at the Crossroads), Svoboda, 1966

 

 

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