17. Competition, monopoly and competition in a command economy

Character traits command economy systems:

1) the tendency to absolutize administrative methods of management, and, consequently, to overestimate the role of the state in economic development. This is what gives grounds to qualify this model as an "administrative-command control system." At the same time, of course, we are talking only about the predominance of command methods, because a purely administrative (as well as purely economic) management system does not exist in real life.

2) planning from what has been achieved, and the planned installation turned into a directive that must be carried out at any cost. In some cases, such targeted tasks gave positive results, but in the final analysis, they increasingly led to excessive costs, to inefficient management, and to the desire to obtain an underestimated plan. Thus, favorable ground was created for postscripts, because the manufacturer did not report to the consumer, but to a higher administrative body, and he reported on paper. And if the report was accepted, then the well-being of the enterprise was ensured regardless of the final results of work, which can only be realistically assessed in the areas of exchange and consumption.

3) centralized distribution of resources, caused by the need for firm targeted tasks as the foundation of planning. This is the basis of the system of funded material and technical supply with a cumbersome mechanism of preliminary applications, which gives rise to the complete dependence of consumers on producers, shortages, the desire to protect themselves by accumulating and deadening production stocks;

4) there are no signs of competition;

5) the monopoly on the means of production belongs to the state.

Under the conditions of the administrative-command system commodity-money relations become formal, cost accounting is violated, redistribution processes and gratuitous withdrawal of funds prevail.

The administrative management system generates:

1) separation of the national economic plan from the objective needs of economic development;

2) the aggravation of the contradictions between the interests of individual levels of management and the lack of interest of lower-level production units in a tense plan;

3) undermining democratic principles in management, suppressing the initiative and creativity of production teams due to the limited rights in making economic decisions that are imposed on them from above;

4) swelling of the administrative apparatus of management, its multi-link nature, which inevitably leads to an increase in bureaucracy in the management system.

Author: Ilyina V.N.

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