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Marx and the Mechanism of Functioning of a Socialist Economy

Author

Listed:
  • Oldrich Kyn

    (Boston University)

Abstract

This paper was presented at the Belgrade conference for one hundred years anniversary of 'Das Kapital'. Marx himself said very little about the concrete organization of a socialist economy. His general remarks about socialism were 'elaborated' by his followers by inference from Marx's criticism of capitalism and by inclusion of principles that did originate with other socialist or 'Marxist' thinkers. This explains why certain views about the organization of the socialist economy that are today presented as 'Marxian' may be in direct contradiction to some of Marx's own views. Marx could not disengage himself completely from his own historical determination. It is quite obvious that to a large extent he was influenced by the topics and analytical tools of his theoretical forerunners and contemporaries. But the evolution of economic theory continued after Marx. New problems appeared and new methods were developed, especially mathematical methods, which Marx could not have used in his time. Marx believed that market must be replaced by a rational planned control of the economy because he saw the market mechanism as functioning purely on ex post basis and that the lack of ex ante coordination of production decisions leads necessarily to the spontaneous imbalances and cyclical fluctuations in market economies. But market does not function solely in an ex post manner. No producer works completely 'in the dark', he always has some information, albeit incomplete, that allows him to anticipate demand and thus determine what is to be produced. The quality of the coordination done by the market depends on how good is the anticipation of future demand. In the XXth century forecasting methods have undergone fast development. Methods of demand analysis make it possible to predict changes in demand for individual types of commodities. Those and many other new developments greatly anhance the available information and improve the ex ante decision-making of firms and thus limit necessary corrections which the market must make ex post.

Suggested Citation

  • Oldrich Kyn, 2005. "Marx and the Mechanism of Functioning of a Socialist Economy," Method and Hist of Econ Thought 0509005, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpmh:0509005
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    Keywords

    Marx; Market Economy; Socialism; Central Planning; Alienation;

    JEL classification:

    • B - Schools of Economic Thought and Methodology

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