5. The economy of the Soviet Union has remained
a highly centralized, planned, and planning economy,
primarily a command economy, functioning best in
time of war and largely indifferent to the needs and
demands of the consumer. The result has been the
transformation within a period of fifty years of an
agricultural economy into a great, modern industrial
economy. The human costs in bloodshed and suffering
of this transformation have been incalculable. The
excessive centralization has led to inefficiency and
waste, the development of a hidden market, and other
abuses. To supplement the controlled economy's efforts
to take care of consumers' needs, the state has tolerated
a private sector in which goods and services are sold
or exchanged for profit. Under the influence of E. G.
Liberman and other economic reformers, some tenta-
tive steps have been taken to decentralize, and to
introduce the concept of net profit in state enterprises
in order to provide incentives and increase efficiency.
Greeted as a return to capitalistic principles, it over-
looks the limited function of profit as conceived in a
socialist economy, in which prices are still controlled
by the central planning authority.
What these and similar reforms do that is difficult
to square with the theory of Marxist-Leninism is to
increase the power of the plant manager over the
workers, and to differentiate even further the incomes
received. Because of differences created by advances
in technology, comparisons in standards of living are
difficult to make between different historical periods.
With respect to per capita consumption of the material
necessities of life, the workers in most of the advanced
industrial economies today seem to enjoy, without the
sacrifice of their freedoms, a substantially higher
standard of living than the workers of the Soviet Union.
But there is nothing in the structure of the socialist
economy which makes it impossible to equal and even
surpass the standards of living of workers in capitalist
countries. An economy that can put a Sputnik in the
sky before other industrial societies, can probably out-
produce them, if the decision is made to do so, in the
production of refrigerators or television sets. The major
differences lie not in what and how much is produced,
but in the freedom to choose the system of production
under which to live.
