Can Neoclassical Economics Underpin the Reform of Centrally Planned Economies?
نویسنده
چکیده
here's a curious symmetry between the arguments propounded over the last century in advocacy of socialism and the present popular discussion of the reform of centrally planned economies. In those old discussions, the vision of socialism was utopian, which was contrasted with the Dickensian realities of capitalism. Now, the disasters of central planning are contrasted with the benefits flowing from perfectly functioning markets. In the conventional wisdom of reform, the vision of markets is utopian and that of central planning concentrates on the awful reality. What is largely missing in the conventional wisdom is a satisfactory attempt to come to grips with the central question that should be answered in formulating reform plans: how does one explain the differences in performance of market-capitalist and centrally planned economies? Of course, capitalism has outperformed central planning. The developed west is therefore an obvious source of ideas for reforms. But the institutions of capitalism come in many varieties and cannot be put in place instantaneously. There are many alternative reform paths, depending upon the importance attributed to each of these institutions. Thus, there remains the problem of tracing the source of the superiority of capitalist economies to specific characteristics. (This point was made clear to me on hearing a Vietnamese official justify single-party rule by noting the economic success of Taiwan and Singapore!) Reformers need a filter that interprets the experience of capitalist and socialist systems. This is exactly where economic theory plays a vital role.
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