Centralized economy concept features of functioning. Centralized economy

The Essence of a Command Centralized Economy

Definition 1

A command centralized economy is a type of economic system in which a central planning authority makes decisions on major issues.

Features of this type of system include:

1. Public ownership of most material resources;
2. Decision making by the team using centralized economic planning;
3. The enterprises are state-owned, carrying out production on the basis of state directives;
4. Assignment of workers to a particular profession, their distribution by district;
5. Establishment of prices for goods by the state;
6. State way of selling products.

Through the command economy, production resources are accounted for and distributed centrally in accordance with the sectors of the economy and regions of the state. At the same time, their rational use was not ensured, since the requirements of each production were not clearly defined.

Distribution of resources in a centralized economy

In a centrally controlled economy, economic benefits are distributed according to top-down directions. The basis of this economy is state property, the role of the manager in which is played by the state planning body, which determines the directives for all enterprises (what goods to produce, what technologies to use, to whom to sell the products).

The centralized command economy is based on:

1. On the central planning of production,
2. On the centralized supply of resources (funding),
3. Centralized pricing.

Remark 1

An important distinguishing feature of a command centralized economy is the ability to quickly mobilize resources to achieve goals set from above. This fact is an advantage in the event of emergency situations (war, natural disaster, etc.), because it is during the war that the role of centralized regulators grows even in states with a market economy.

In our country, the command centralized economy was most clearly manifested during the industrialization of the 1930s.

Disadvantages of a command centralized economy

An economy with centralized control has a number of serious shortcomings arising from the fact that this system is not democratic.

All important decisions in it are made by the party elite, which is only concerned with strengthening its own power and self-preservation. This type of power is best manifested during emergencies (wars, conflicts, upheavals), which the system itself provokes for the sake of its self-preservation by maintaining a state of emergency in society (repelling threats from outside, fulfilling the next plan for 5 years).

Remark 2

The main strategic goal of power (the main economic law of a centralized command economy) is the maximum production of means of external and internal suppression (weapons system, "services" of the secret police and propaganda agencies).

Resources are allocated to consumer goods according to the minimum need in accordance with the residual principle, while wealthy members of society are not natural allies of this system (they are more concerned with improving their own well-being, and do not seek sacrifices in the name of the people or the party).

Example 1

An example of this situation can be considered the Soviet economy, which offered the citizens of the Soviet Union squalid housing, obsolete cars, poor quality products, standardized clothes and shoes. At the same time, the production of the most modern tanks, military aircraft, submarines was launched in large numbers - large funds were directed to the maintenance of the army.

At all historical stages of human development, society faces the same question: what, for whom and in what quantities to produce, taking into account the limited resources. The economic system and types of economic systems are designed to solve this problem. And each of these systems does it in its own way, each of them has its own advantages and disadvantages.

The concept of an economic system

An economic system is a system of all economic processes and production relations that has developed in a particular society. This concept is understood as an algorithm, a way of organizing the production life of society, which implies the existence of stable ties between producers, on the one hand, and consumers, on the other.

The main processes in any economic system are the following:

Production in any of the existing economic systems is carried out on the basis of appropriate resources. some elements are still different in different systems. We are talking about the nature of the mechanisms of management, the motivation of producers, etc.

Economic system and types of economic systems

An important point in the analysis of any phenomenon or concept is its typology.

The characteristic of types of economic systems, in general, is reduced to the analysis of five main parameters for comparison. This:

• technical and economic parameters;
• ratio of the share of state planning and market regulation of the system;
• relations in the sphere of property;
• social parameters (real income, amount of free time, labor protection, etc.);
• mechanisms of the system functioning.

Based on this, modern economists distinguish four main types of economic systems:

1. Traditional
2. Command planning
3. Market (capitalism)
4. Mixed

Let us consider in more detail how all these types differ from each other.

Traditional economic system

This economic system is characterized by gathering, hunting and low-productive farming based on extensive methods, manual labor and primitive technologies. Trade is poorly developed or not developed at all.

Perhaps the only advantage of such an economic system is the weak (almost zero) and minimal anthropogenic pressure on nature.

Command-planned economic system

A planned (or centralized) economy is a historical type of management. Nowadays, it is not found anywhere in its pure form. Previously, it was characteristic of the Soviet Union, as well as some countries of Europe and Asia.

Today, more often they talk about the shortcomings of this economic system, among which it is worth mentioning:

• lack of freedom for producers (commands "what and in what quantities" to produce were sent from above);
• dissatisfaction with a large number of economic needs of consumers;
• chronic shortage of certain goods;
• occurrence (as a natural reaction to the previous paragraph);
• the inability to quickly and effectively introduce the latest achievements of scientific and technological progress (due to which the planned economy always remains one step behind the rest of the global market competitors).

However, this economic system also had its advantages. One of them was the possibility of ensuring social stability for everyone.

Market economic system

The market is a complex and multifaceted economic system that is typical for most countries in the modern world. Also known by another name: "capitalism". The fundamental principles of this system are the principle of individualism, free enterprise and healthy market competition based on the balance of supply and demand. Private property dominates here, and the desire for profit is the main incentive for production activity.

However, such an economy is far from ideal. The market type of economic system also has its drawbacks:

• uneven distribution of income;
• social inequality and social vulnerability of certain categories of citizens;
• instability of the system, which manifests itself in the form of periodic acute crises in the economy;
• predatory, barbaric use of natural resources;
• weak funding for education, science and other non-profit programs.

In addition, a fourth type is also distinguished - a mixed type of economic system, in which both the state and the private sector have an equal weight. In such systems, the functions of the state in the country's economy are reduced to supporting important (but unprofitable) enterprises, financing science and culture, controlling unemployment, etc.

Economic system and systems: examples of countries

It remains to consider examples for which this or that economic system is characteristic. For this, a special table is presented below. The types of economic systems are presented in it taking into account the geography of their distribution. It should be noted that this table is very subjective, since for many modern states it can be difficult to unambiguously assess which of the systems they belong to.

What type of economic system is in Russia? In particular, Moscow State University professor A. Buzgalin described the modern Russian economy as a "mutation of late capitalism." In general, the country's economic system is considered today to be transitional, with an actively developing market.

Finally

Each economic system responds differently to the three "what, how and for whom to produce?" Modern economists distinguish four main types: traditional, command-and-plan, market, and mixed systems.

Speaking about Russia, we can say that in this state a specific type of economic system has not yet settled down. The country is in transition between a command economy and a modern market economy.

“Under capitalism, one person exploits another; under socialism, the opposite is true.”

A distinctive feature of the basic principles of a centralized economy is the prefix "not" before all the principles of a market economy (meaning the background, not the actual prefix).

1. Form of ownership:

• - common property (public);
• - collective - an agricultural economy, but the ownership of the land itself belongs to the state, i.e. she was the same public.

This is the dominant principle of a centrally controlled economy. In many countries there was also private property. Sometimes it was even the basis for the functioning of 3/4 of the national economy, but the agricultural sector did not play a major role, so it did not matter as much as in a market economy. The only form of individual property is an individual (apparently, subsidiary) farm.

2. State planning and government. An extensive structure, in accordance with which all economic entities were regulated according to a single state plan. V. I. Lenin: "The state is a single factory." Each business entity knew how much it received and from whom, and to whom it shipped and how much. There was no at least some hint of initiative and economic independence.

3. No competition or little competition. Marketability allowed:

• - in the implementation of above-plan products;
• - in the sale of products of subsidiary farms.

In the USSR, this was a serious segment (for example, 2/3 of the potato market, personal needs and food), although the overall share was not large.

4. General excess of demand - shortage. Not only in consumer markets, but also in the markets for industrial goods.

5. Official prices were not a rational benchmark for production (in a market economy, the main benchmark is demand, but here no one looked at it).

6. In any country, disparate economic entities operate in all areas (for example, finance - federal, regional, etc.), and in a centralized economy there is a common monetary and financial system.

7. For all states with a centrally controlled economy, a shadow economy is characteristic:

• - the entire construction sector;
• - a significant part of the collective farm;
• - wherever the result (income) does not correspond to the costs.

In fact, it contributed to the redistribution of resources into the pockets of individuals.

8. Specific development system: planning from the achieved - an external stimulus for economic growth. There were no intrinsic motivations.

9. “Soft” budget constraints: the rigidity that accompanies the budget in a market economy does not exist in a centrally controlled economy. Revenues equaled expenses by running the printing press.

10. Opposite sources of economic growth in relation to the market system. For market systems: intensive growth - improving the technical characteristics of equipment, increasing the maximum efficiency of each employee, etc. For a centrally controlled economy: an extensive path - the use of an increasing number of workers, machines, land, etc.

11. Political factor - the dominance of one political party. All the disadvantages, like a monopoly. Von Hayek "Socialism is a pernicious arrogance". Gosplan for each year, and sometimes medium-term (5 years) and long-term planning with directions and development prospects. Predetermines the life of every entrepreneur. Life is the opposite (not recording events, but events by recording). As they say: "The road to hell is paved with good intentions" - i.e. this system is inhuman, there is no place for man in it.

Any model is always historically conditioned, and, as experience shows, attempts to reconstruct the model by importing other institutions are pointless.

Any modern diversified social production needs a certain internal harmonization And organizations. How, say, to combine the production of grain, baking bread and the needs of the population in it, so that all producers and trade are profitable, and consumers are satisfied? Specifically, such a docking is manifested in the solution of four main problems by any society: what, how, for whom and how much to produce. It is clear that different countries have solved and are solving such problems in different ways. And yet, in general, we can distinguish two main ways of organizing production and, accordingly, two types of economic systems: centralized And market.

Centralized economic system

The essence of this system is state monopoly, those. that the all-powerful state (through its powerful bureaucracy) absolutely dominates the economy. Government officials from the center command all economic resources and decide with absolute power what, how, for whom and how much to produce, and most importantly, how distribute produced. Therefore, such a coercive system is often referred to as command, order, distribution economy. Describing it, we single out the following main traits (Fig. 4.26).

First, the economy reigns supreme state property to the means of production. Land, plants, factories, transport, trade and other enterprises - everything belongs to the state. The property of individual citizens is usually limited to personal property and a small subsidiary plot.

Secondly, all production, exchange and distribution of products are carried out according to government plans, which determine thousands of the most complex relationships in the national economy. The inevitable errors in such comprehensive planning give rise to numerous inconsistencies, failures and deficits in the economy. And a huge bureaucracy works to draw up and ensure the implementation of such detailed plans.

Rice. 4.26. Characteristics of a centralized economy

At the same time, thirdly, instead of stimulating production of economic levers (attractive taxes, orders, loans), purely administrative methods of management (dictatorship of the bureaucracy, orders, control, punishment, encouragement), and the main goal of the activity of enterprises is not to work for the consumer, but to fulfill plan (no matter how unreasonable it may be).

Fourthly, the rigid centralization of the economy also works financial dictatorship of the state. The lion's share of all funds of economic entities is centrally redistributed through the state budget. High taxes and deductions flow into a single center in huge financial flows, from which officials then arbitrarily allocate budget allocations to those who, from their point of view, need it.

Prices, salaries, investments, profits and losses - everything is "scheduled" in advance and guaranteed by the state at a planned level. Therefore, the financial situation of producers practically does not depend on their initiative, creativity, labor results and consumer reaction. Moreover, the initiative is even punishable: "amateur" and "unrecorded" innovation (even if very effective) can knock the enterprise out of the planned track, worsen its financial situation and lead to the replacement of the director.

Minuses total centralization can be traced on the example of the former USSR. Chief - unsatisfactory work state property. She was badly used, taken away; equipment has not been updated for decades, resource efficiency was low, and costs were high. Mismanagement, irresponsibility and passivity of workers, indifference to any innovations reigned in the public sector.

At the same time, state-monopoly systems have their own pros. They (NB: under the condition of a skilled, non-selfish and anti-popular leadership) can be more stable and give people more confidence in the future; provide a more even distribution of life's blessings in society and the minimum necessary for everyone. The planned management of all labor resources makes it possible to avoid open unemployment in society (although, as a rule, this is achieved by artificially curbing the growth of labor productivity: where one person could work, two or more people work).

The state paternalism inherent in these systems (the all-encompassing guardianship of the people by the state) is especially convenient for the dependent and passive part of society, as well as for those who simply love, in Dostoevsky's words, "to live on a sharomyzhka." All of them prefer, although modest and free, but a quiet existence without any special worries, believing that it is the state that should "feed the people."

That is why such systems are tenacious; they have a lot of fans. And yet, as Saltykov-Shchedrin notes, "it is impossible to feed anyone by mere disposition" (35-1,118). First you need produce what can be disposed of. Therefore, all modern economies charged with efficient production work not on administrative-command, but on market principles.

Managed centrally, by state bodies, on the basis of directive plans and programs, direct subordination of lower bodies to higher ones, with state ownership of.

Economics and law: a dictionary-reference book. - M.: University and school. L. P. Kurakov, V. L. Kurakov, A. L. Kurakov. 2004 .

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