The rise and fall of the new economic system

Michael Keren*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

1 Scopus citations

Abstract

This chapter provides an outline of the principal mechanism of the new economic system (NES) reform, to explain why it was apparently successful at first, and to analyze the causes for its ultimate failure. Every Soviet-type economy is basically one huge firm, run by a planning hierarchy. The NES delegated many balancing functions and reduced the intervention of the top in enterprise affairs—though it is possible that much of what the top did not prescribe was added by intermediate organs. The first years of the NES were characterized by slack plans. They were the proper environment for an experiment each of whose parts could not have functioned under taut plans. The guidelines for the NES were imbued with the desire to improve the structure of incentives and prices so as to permit indirect, instead of administrative, direction of the economy.

Original languageEnglish
Title of host publicationGerman Democratic Republiv
Subtitle of host publicationA Developed Socialist Society
PublisherTaylor and Francis
Pages61-84
Number of pages24
ISBN (Electronic)9780429706271
ISBN (Print)9780367017422
DOIs
StatePublished - 1 Jan 2019

Bibliographical note

Publisher Copyright:
© 1978 by Taylor & Francis.

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