This essay is a revised version
of the authors’ article: “notes on the Long-term Prognosis of
Czechoslovak Economic Development” which appeared in
We comment especially on the essay of M. Soucek, J.
“Preparation of a Long-term Prognosis of Czechoslovak Economic
hospodarstvi, No. 9 - 11/1965 and in abbreviated form in the
Czechoslovak Economic Papers, No. 7.
For instance in the well-known discussions between L. von Mises,
F. A. Hayek, H. Dickinson, A. Lerner, O. Lange, and others.
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
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
Economic Philosophical Manuscripts, SNPL, Praha 1951,
“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).
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.
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.
Jan Tinbergen uses the term “economic regime”
,“characterized by a number of institutions (each with their
activities, procedures and methods)” —
Central Planning, Yale University Press 1964, p. 81
of the Accelerated Realization of
the New System of Management, State Commission for
Management and Organization, Praha, May 1966.
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
2) How shall goods be produced? That is, by whom and with
what resources and in what technological manner are they to
3) For whom shall goods be produced?”, in other words
problems of distribution and utilization.
Beyond the Welfare State, Yale University Press, 1963, p.
The role of “subject” in social development is discussed by
Oliver Tenzer in his article “Filosofické problemy zakonitosti
ekonomickych procesu” (‘Philosophical Problems of Economic
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.
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.”
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.
R. Dorfman, P. A. Samuelson, R. M. Solow,
Linear Programming and Economic Analysis, McGraw-Hill
1958, chapter 13 and 14.
Socialist economics. Survey of Contemporary economics,
Irwin 1948, page 414.
On the Economic Theory of Socialism, The University of
Minnesota Press 1938.
"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,
O. Lange, “The Foundations of Welfare economics”,
Econometrica Vol. X/1942, pages 215/228.
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.
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.
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.
A society chooses unbalanced paths in case of war, or to
accelerate industrialization. Albert O. Hirschman in his
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
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.
The matter in question is the intertemporal efficiency, see
Dorfman, Samuelson, Solow, quoted book, chap. 12.
See for instance Jaroslav Habr,
A Contribution to the Theory of Sliding Plans. Essays in Honour
of Michal Kalecici, PWN, Warszawa 1964
Radovan Richta, “Dynamics of our Time and our Revolution” (,,Dynamika
doby a nase revoluce”),
27. 5. 1967 and R. Richta and Co.,
Civilizace ma rozcesti (Civilization at the Crossroads),