Tuesday, December 4, 2007

USSR economy

If Marxist-Lenninist Communism was so inefficient, then why did it last in one form or another for over 70 years in Russia and the Soviet Union? Did it last so long because inherently it was not as inefficient as we are made to believe, but that some othre circumstances caused its demise? The Soviet system was not spectacularly inefficient and was an adequate, though far below average, system for running. Hower, rahter like a gas-guzzling car, the planned economies became spectacularly inefficient in the face of resource scarcity, particularly oil scarcity. A planned economy is not flexible ecough to reallocat quickly scarce resources that suddenly decline in production.
Other thoughts say that a planned economic system is relatively inefficient, thought it is stillable to obtain high rates of growth by merely moving from an agrarian economy to an industrial economy. However, as a greater percent of a work force becomes factory workers rather than farm workers, ther is less potential for economic growth based on industrialization alone. Further growth depends on innovation.

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