Socialist economic policy

Socialist economic knowledge mainly derives from "Socialist political economics"and from "Theory of planning". Beyond these are branch economics, that is to say the economics of certain branches of production (industry, agriculture, etc.) as well as of certain economic functions (budget, banking system, price system, etc.). Branch economics operate in both the theory of management and in the field of economic policy. Until quite recently economists in socialist countries thought that the theoretical study of socialist economic policy could be disregarded. It was assumed that the knowledge of general economic policy can be practically integrated with the

theory of national economic planning; it was feared that the independent study

of economic policy might eclipse the theory of planning. If the state breaks down the plan of the national economy by institutions, and directs the economy by means of compulsory plan indices, the question is justified: what need is there for the theory of economic policy besides the theory of plan ning? In this kind of normative guidance each essential criterion derives from state planning. But as a result of economic reforms-the system of state economic guidance in socialist societies has undergone considerable changes. This is partic ularly striking in those socialist societies where state economic guidance turned into planned market control. In the case of this particular economy, economic decisions controlled by the market attain considerable importance while at the same time the state establishes conditions for the market under which economic decisions serve the interests of socialist society. Accordingly, in addition to the planning of the national economy, planned market regulation has become, so to speak, an independent problem of economic-political investigation, a fact that cannot be disregarded by scholarship.

This book does not discuss the actual economic conditions of a particular country. It consciously approaches the problem in a more general way. The process of converting plan directives into a regulated market mechanism is supported by scientific discussions. In these discussions the experiences gained of the practice in capitalist countries play an important role. These experiences cannot be disre garded, for two reasons. First, socialist planned economy came about and devel oped on the pattern of a centrally guided model; socialist economic conditions only provide scanty experiences and are mainly due to the fact that certain socialist countries made progress in activating commodity and money relations. In the second place, in up-to-date capitalism, the role of increased government regula tion of economic processes, and elements of planned market control crop up.