Lessons of the Socialist Planned Soviet Economy

Lessons from the Socialist Plan of the Soviet Economy German Prime Minister Bismarck said long ago after reading Marx and Engels' Communist Party Declaration. "This is very interesting, but now we must find a country that I do not want to regret experimenting with." The country where this experiment is conducted will be Russia. The main part of the experiment included the establishment of a socialist planned economy defined as the economic situation, and all production departments were managed and owned by government agencies.

After the collapse of the Soviet Union and the Eastern European group, many of the remaining socialist countries that had hosted a central planned economy began implementing reforms to transform their economy from the central plan. In Central and Eastern Europe and the Soviet Union, the transition from socialist production to capitalist production was made along with the shift from planned economy to market economy. In Asia (China, Laos, North Korea, Vietnam) and Cuba, the ruling Communist Party introduced a market mechanism, and the planning system was reformed without systematic change.

By the late 1980s, the Soviet economy completely failed due to the internal imbalance and strict management required by the controlled economy and the socialist property system. However, Russia also inherits the legacy of the Soviet Union, including an evolving infrastructure, a number of ineffective but well-functioning industrial assets, and huge deposits. The Russian government elected not to reform the economy to cope with economic challenges. Instead, the focus is on maintaining the current budget deficit in the short term. The main strategy of the government is tax reduction and reduction of public expenditure.