4.6 ndian onom
upon the type of economic system prevalent in the USSR, Poland, Hungary, Austria, Romania,
the country. etc., and finally China. Basically, it was the
migration of some of the great economists from
1. Imperative Planning the Soviet Bloc countries to Britain and the USA
The planning process followed by the state that a proper study and discussion started on
economies (i.e., the socialist or communist) is the very nature and purpose of planning in the
known as the imperative planning. Such planning command economies. Many of these economists
is also called as directive or target planning. Such went back to their countries of origin after the
planning had two main variants. In the socialist Second World War to serve and in some measure,
system, all economic decisions were centralised in suffer the revolution there.13 It was their articulate
the hands of the state with collective ownership and contemporary economic thinking which
of resources (except labour). In the communist formed the basis for the idea of mixed economy
system (i.e., China of the past) all resources were in the post-War world. One among them was
to be owned and utilised by the state (including Oskar Lange, the famous Polish economist, who
labour). Thus, communist China was the purest after returning home to serve as the Chairman of
example of such planning. In the case of the Soviet the Polish State Economic Council (as India has
Union a little bit of ‘market’ did exist—even after the Planning Commission) suggested and coined
the collectivisation of agriculture was enacted by the concept of ‘market socialism’ in the 1950s. His
Stalin in 1928 only 94 per cent of Soviet peasants ideas of market socialism were cancelled by not
could be included in the process.12 Basic features only Poland but also by other state economies of
of such planning are as under: the time.14
(i) Numerical (i.e., quantitative) targets of The peak of this type of planning was
growth and development are set by the reached in China after the Cultural Revolution
plan. As for example, five lakh tonnes of (1966–69), which led to an economic slowdown
steel, two lakh tonnes of cement, 10,000 in the country, which had adopted a soviet-style
kms of national highways, 5,000 primary central planning system after 1949. Under Deng
schools, etc., will be produced/built in Xiaoping (1977–97), China decentralised a great
the coming 5 or 6 years. deal of economic power with its announcement
(ii) As the state controls the ownership rights
13. From Poland two great economists oskar lange
over the resources, it is very much possible (1904–65) and Michal Kalecki (1899–1970); from
to realise the above-cited planned targets. Hungary, William J. Fellner (1905–83), Nicholas
(iii) almost no role for the market, no price Kaldor (1908–86), Thomas Balogh (1905–85) and Eric
Roll (1907–95); from post-war Austria ludwig von
mechanism with all economic decisions Mises (1880–1973), Friedrich A. von Hayek (1899–
to be taken in the centralised way by the 1992), Fritz Machlup (1902–83), Gottfried Haberler
state/government. (1900–96) and Joseph A. Schumpeter (1883–1950)
[J.K. Galbraith, A History of Economics, Penguin
(iv) no private participation in the economy, Books, london, 1987, pp. 187–90].
only the state plays the economic role. 14. It was blasphemous to preach in favour of market in the
The Command Economies followed this kind socialist world at that time—he was not put behind the
bars was a great mercy on him. oskar lange towards
of planning. That is why such economies are also the end of his life told Paul M. Sweezy, the most noted
known as the Centrally Planned Economies— American Marxist scholar, that during this period he did
not retire for the night without speculating as to whether
12. Samuelson, P. A. and Nordhaus, W. D, Economics, he might be arrested before the dawn (J.K. Galbraith,
McGraw-Hill Companies Inc., N. York, 2005., p. 591. A History of Economics, p. 189).