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class 2 - ECON 3808 The economics of transition The...

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ECON 3808 – The economics of transition The Socialist System
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Outline Marxism System prototypes Common attributes before revolution Power ideology Centrally planned economy Criticism Costs and benefits of central planning Failures of market system
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Marxism Developed in the 19 th century by Karl Marx and Friedrich Engels The foundation of communism A political, economic and social philosophy based on: Materialistic interpretation of history; Critique of capitalism; Theory of social change.
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System prototypes Three prototypes: The revolutionary-transitional system; The classical system; The reform system. Are those prototypes consecutive historical periods? A forth stage would follow: the postsocialist system. Actual course of history more complicated: different order or alternation of stages.
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Before Socialist Revolution How similar the internal conditions were in various socialist countries when each society embarked on building a socialist system? Distinction: socialist revolution brought by: Internal forces (Soviet Union); External forces. Majority of cases: combination of internal and external forces.
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Main common attributes for internally revolutionized countries Poor and economically undeveloped; Proportion of industry low; Small modern industrial sector; Precapitalist features in their social relations and property forms; Inequality in the distribution of income; Political systems: no political liberties, brutal dictatorships; Partial or total dependencies of other states; Before the revolution, events that shook up the institutions of society.
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Main common attributes for “externally revolutionized” countries Very heterogeneous; Previous list: Mongolia, Afghanistan; Majority of Eastern European countries: higher level of development
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The Revolutionary Transition toward the Classical System Common features of transition period (own efforts): Public atmosphere and political climate: Enthusiasm for great masses of people, triumph, ready to sacrifice more, working for community is self-evident obligation (“heroic age” of socialism) Actions? Expropriation: state or collective ownership; centralizing production and distribution; Confiscate great estates and divide them among poor peasants; Redistribution of property and income; Revolution during war: food distributed fairly; rationing; harassment and prosecution for the black marketers; Public education, free basic health care, vacations for children; Persecution of previous nobility, wealthy, old regime’s leading politicians and officials; Physical violence and merciless terror; No laws and order or legal security in society: symptoms of anarchy; Appearance of active resisters of the revolutionary change (more violence, retaliation);
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Structure of power 1. The Party - Fundamental institution in the power structure; - One party system; -
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