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Comrade 07/17/2018 (Tue) 22:37:37 [Preview] No. 6919
why has it failed?
Why has what "failed"
Because all communist economy's was so reliant on Soviet Union they only had to take Soviet Union out. In a state of panic people of other communist country thought short term and counter revolutionarys took hold. Hope that's helpful comrade
>Lack of free trade mean highly ineffective allocation of resources in comparision to Pareto-efficiency
>Spontaneous nature of economic relations meant that planning was essentially impossible, making matters even worse
>Effective competition with free trading nations was impossible, neccesarily leading to protectionism, which made matters much more worse
>Lack of economic freedom meant that political freedom was of little value as well, leading to authoritarianism and one-party regime
>Imposition of reforms during Glastnost' towards social democratic state of the union lead to extremely nationalist forms of government having to barrier to speech and public agitation

Society needs free trade to function and prosper. The problem is how to combine this fact with demands of justice for the least well-off class. I believe that social democracy is the only adequate answer to this antinomy.
Because it was our(Russian) big prank
Real world markets do not generate Pareto efficient results. You have to be literally brain-damaged to believe otherwise. Of course, you don't really believe that, the term is just a buzzword you heard from others who also were just mindlessly repeating. You don't know what Pareto efficiency means. A Pareto improvement is a change that nobody is against. A Pareto efficient distribution is one that cannot be Pareto improved. A current owner and potential seller of a thing can have a threshold price X in mind, selling at that price or higher he feels is a benefit to him. A potential buyer can also have a threshold price Y in mind, and considers buying at that price or lower a benefit. If X≤Y, there exists a possible price where both would feel a trade beneficial. But does that mean the trade must occur? No, because neither side knows the threshold for the other person and neither side has an interest in meeting in the middle, the interest of one is to push the price as high as possible within the interval, and for the other it is to get as low as possible. This back and forth between offers can burn a lot time and it can happen, and it does happen regularly, that one side finally says fuck that and so the possible trade that would be beneficial to both doesn't occur.

Now, I know what "argument" you want to bring up next (because you are copypasted soulless automatons): that this inefficiency is not the fault of the market, but the fault of the people. This is called moving the goalposts. And it's no better than a tankie saying a byzantine socialist bureaucracy is perfect, just the people in it are making mistakes. And of course you didn't even read Hayek, else you wouldn't have combined his mug with the pseudo-mathematical certainty of the Pareto claim and instead would have just appealed to intuition and experience.

Why do you feel the need to fake knowledge even when you are anonymous?
'It' hasn't you absolute lackwit.

>First he reviewed eighteen studies of technical efficiency: the degree to which a firm produces at its own maximum technological level. Matching studies of centrally planned firms with studies that examined capitalist firms using the same methodologies, he compared the results. One paper, for example, found a 90% level of technical efficiency in capitalist firms; another using the same method found a 93% level in Soviet firms. The results continued in the same way: 84% versus 86%, 87% versus 95%, and so on.

>Then Murrell examined studies of allocative efficiency: the degree to which inputs are allocated among firms in a way that maximizes total output. One paper found that a fully optimal reallocation of inputs would increase total Soviet output by only 3%-4%. Another found that raising Soviet efficiency to US standards would increase its GNP by all of 2%. A third produced a range of estimates as low as 1.5%. The highest number found in any of the Soviet studies was 10%. As Murrell notes, these were hardly amounts “likely to encourage the overthrow of a whole socio-economic system.” (Murell wasn’t the only economist to notice this anomaly: an article titled “Why Is the Soviet Economy Allocatively Efficient?” appeared in Soviet Studies around the same time.)
>Two German microeconomists tested the “widely accepted” hypothesis that “prices in a planned economy are arbitrarily set exchange ratios without any relation to relative scarcities or economic valuations [whereas] capitalist market prices are close to equilibrium levels.” They employed a technique that analyzes the distribution of an economy’s inputs among industries to measure how far the pattern diverges from that which would be expected to prevail under perfectly optimal neoclassical prices. Examining East German and West German data from 1987, they arrived at an “astonishing result”: the divergence was 16.1% in the West and 16.5% in the East, a trivial difference. The gap in the West’s favor, they wrote, was greatest in the manufacturing sectors, where something like competitive conditions may have existed. But in the bulk of the West German economy — which was then being hailed globally as Modell Deutschland — monopolies, taxes, subsidies, and so on actually left its price structure further from the “efficient” optimum than in the moribund Communist system behind the Berlin Wall.

>The neoclassical model also seemed belied by the largely failed experiments with more marketized versions of socialism in Eastern Europe. Beginning in the mid-1950s, reformist economists and intellectuals in the region had been pushing for the introduction of market mechanisms to rationalize production. Reforms were attempted in a number of countries with varying degrees of seriousness, including in the abortive Prague Spring. But the country that went furthest in this direction was Hungary, which inaugurated its “new economic mechanism” in 1968. Firms were still owned by the state, but now they were expected to buy and sell on the open market and maximize profits. The results were a disappointment. Although in the 1970s Hungary’s looser consumer economy earned it the foreign correspondent’s cliché “the happiest barracks in the Soviet bloc,” its dismal productivity growth did not improve and shortages were still common.
it hasn't failed. it was (and still is) sabotaged


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