Economics of Transition

Portland State University

June-July 2010

Mid-Term Exam

Mary Eng

1. Describe the political and economic philosophy underlying the attempts to create a new

socialist society and economy? What were the moral justifications for a socialist revolution?

What was the idea of man in the communist thinking?

A new socialist society was underpinned with many philosophical movements as they spread

across Europe. Following the enlightenment revolutions in France and the Americas, a shift to

the life of the individual, or to the concept of rights, re-balanced the ethos in favor of ordinary

humans. Previous notions of feudalism, serfdom, and the slave trade, and their accompanying

premise of aristocracy, found their demise in a new romanticism which glorified the “human”,

or human connections. The Declaration of the Rights of Man paved the way for new ways of

thinking of human existence and the notion of “rights” began to permeate theory. Accompanying

upsurges in romanticism explored the previously inarticulated realm's of human consciousness.

As the collapse of the serf systems, and the undermining of aristocracies and oligarchies

prevailed in pockets of resistance, Karl Marx emerged as a poetic prophet to accompany the

dramatic changes of the Industrial Revolutions. Many other political philosophers explored

notions of utopic return to the land, and communal existence as demonstrated in the English

countryside. The clear premise of the family at its core as a social phenomenon, reverberated

through the historical norms of fiefdom and vassals. But the inequities which played out,

needed better masks. New revolutions of thought delivered through inefficient mechanism of

printing press, and posted letter, the explorations of new norms which might empower, or at

least conceal the master slave dialectic. The emergence of the individual in a new romantic

dawning became the starting point for the break away from the sacrosanct medieval power

norms of serfdom. But with the new divine individual, distinguished from the aristocratic lineage,
then came the resubmersion under notions of the collective. A certain utility prevailed in the

presupposition of the collective good. As moral philosophers found ways to balance “the good,”

clearly Nitzschean beyond good or evil proto-anarchisms did not hold force, except perhaps as

an undercurrent of will to power underneath the social good rhetoric.

The surface read of all socialist revisionism, found ways to interconnect the consciousness

of human existence as one amorphous, interdependent, inconsequential, and reliant on

the well-being of the whole. The ultimate utility of human interconnection in the increasingly

technological society, found roots in the divisions of labor and assembly-line mechanisms of

production. The emerging utility to care for each portion of the whole, then became the indirect

premise of the emerging doctrine of globalization, which views the world as an interconnected

economy.

And where corruptions enter the idealistic methodology, cannot be underestimated.

Where Marx, or Mill, or the social utopianism experimenters might trumpet such ideals of

value, and critique the painful subrogation and extraction of human capital, corruptions might

instantly infect the mechanisms of ideology. As clearly the ethic of social good held force for

humanitarian aims, it might become clear that aristocracy by any other name, or with mitigated

poverty for the serf class, is still at its basest level oppression. And so it might be said that

experiments with socialism have heretofore been incomplete, due to rerum naturum. That

human nature prevents true egalitarianism, and leaves loopholes for profit skimming and new

more covert aristocracies, does not surprise, as even the Swedish model finds critics of the

corrupt implementation of the surface protective social policy. As humanitarianism conceals

the right by might, as it might make its way through the process, a new way of configuring the

socialist ideal might be as a newer way of implementing the Divine Right of Kings, such that the

peasantry are merely better fed, better housed, and consequently better cogs in the industrial

mechanistic kingdom. They are merely a better maintained machine.

The moral justification for socialist revolution found dignity in the ideals of the whole, or

the collective, the greatest good, utility. And the flexibility and range of offerings from or of the

people would not imperil their subsistence. But what merit is ideology as it is most available only

to the ruling class? In what ways would the diluted propaganda of empire reach the people?
And so also the new economies of industrial utility found better ways to subjugate their

colonized laboring class, by endowing them with the thin veneer of dignity implicit in the “social

good” the “collective” or the communal. And with the near deistic worship of ideologues, whether

Marx, or Lenin, or Stalin, the ideology of fairness, and the tedium of the bread queue, concealed

the enslavement from the enslaved, and gave them new delusions of freedom and “right” where

subsistence became glorious in the new mysticisms of demagogue idolatry and manichean self-

denial under the socialist name.

2. The economy of Soviet Union can be looked at as one huge enterprise. Describe the main

organizational task to run this or any enterprise. What are the similarities with and differences to

a “normal” enterprise in a market economy? Why may this comparison be misguided after all?

The Soviet Union in a sense can be looked at as one enterprise. The main organizational

tasks to run any enterprise include managing labor, capital, materials, production, supply, and

demand. The effects of social control cannot be overestimated. As human beings are so gullibly

infected with desire for things, so too we are manipulatable across many vanities and vagaries.

If empire told us, no you do not want for soap, or technology, might the social control exerted

by anti-advertising demonstrate the power to manipulate market needs. The implementation

of labor strategies function as the heart of the affair. And all of this critically relies on the

motivational effects of ideology, propaganda, collective social experience, force of habit. As the

momentum of the working class propulsed itself, reliant on the centuries of serfdom encoded

into a atavistic mentality, then next might come concern for material. From a western or British

colonial perspective which trumpets the market economy's freedoms, it is hard to surmise

wherefrom might spring innovation. The market economy approach premises personal gain and

profit as the prime psychological motivator for invention and generative activity. The stresses

of the competitive approach lead to the valuable pulls between venture capital acquisiton, the

quest for human capital, resource management, and mitigation of damages to earth or humans,

all-important now in the transparent age.

 The Soviet Union existed as a historical entity in a historic time with a specific access to

historic information distribution systems. As the Soviet Union critically censored free press

activities, limited growth of technology sectors, and dominated propaganda channels, there

is no comparison with what now and increasingly so in the future will be “normal” market

economy conditions. As the near future leads towards total transparency in the eyes of the

global internet, huge ethical fiascoes will not be able to stay submerged in an ocean of retro-

fitted propaganda. Even today, in the modern transition economy, journalists who blog find

themselves assassinated like Anna Politkovskaya or suppressed and even beaten and maimed

as a May 2010 series of articles in the New York Times details.

To compare a “normal” market economy with the mechanisms of the Soviet system might

be in error if it erroneously obscures the technological evolutions as they effect data resources,

journalism, theoreticians ability to work or speak, the transmission of information, the deliberate

effects of propaganda towards indoctrination, or the actual acquisition of resources and their

conversion into products with the infusion of energy.

International effects such as subsidy, embargo, global shortages, and market manipulation

also effect directly the unflowering of this system. Should inefficient energy policies be

implemented to avoid reliance on external energy sources, then the Soviet system might in

effect be operating in many collective consciousness bubbles preventing the populace from an

international perspective.

As internet in China is squelched and curtailed as a means towards total thought control

and political suppression, so too are the more subtle effects of advertising as they affected the

market consciousness in the Soviet eras. What to buy? What not to buy? What prevails on black

market?

And for energy policy, if inefficient systems, or nuclear energy systems are used which force

the vector of disposal on the chronological time frame, far into the unknown future, how is the

market system or the Soviet system existing across curvatures of time and space, which both

radically propel the nation both into the future and down the mind-warping paths of retrogressive

or technological media suppression, which inhibits comprehensive social cognition on the part of

the denizens.
 In such a way, comparing market economies and the Soviet system may be useful and

elucidating, but the variance of so many factors, least of which is not the linguistic and

ideological, as well as the chronological, journalistic, or environmental, might leave us less

confident of our understanding prior to assaying the question.

3. How would you explain this phenomenon? Why doesn’t anyone produce spare parts? What

are the impacts of a shortage of spare parts on the system as a whole? What loopholes the

firms/people found to deal with the problem? How might you change the incentives to produce

more desirable outcomes?

The painful and erroneous illusions of modernity distance the experience of goods from their

actual mechanism of production. As workers in component parts factories for the Iphone's

supplier Foxconn plunged to their deaths in numerous suicides, we the living have untold

questions to ask ourselves about supply and demand. The ethical breach implicit in market

economics values price and profit ahead of human dignity, in direct sequence with

methodologies of the nascent slave trade of the New World. The internationally emergent

conceptions of “human rights” or fair trade and such have drawn out ethical imperatives missing

from the mechanisms of our greed towards production. Whether it is guitar factories where

laborers routinely lose fingers (Gibson), or slaughterhouses with such an irresponsible killing

speed as to routinely maim exploitable immigrant labor (Tyson et al.), the predecession in value

systems which gives primacy to the literal extraction of pennies from human life and health,

underlies problems of demand. If the diamond trade is dependent on bloodshed, De Beers might

still see the light of day, for a petty profit. The cobalt and cadmium critical to our electronics

craze are extracted from the earth only by the physical exploitation of the miners who die in their

early thirties of heavy metal toxicity, as described by Amnesty International. As the Herero

Genocide demonstrated and explored the possibility of the strict utilitarian exploitation of human

existence for workdeath labor camps, so the market approach cannot sanitize itself ethically of

the actual harm incurred by numerical profit exigencies. In the Soviet system that was, chronic

shortages were powered by a lack of empire. Where Imperial Britain, colonialist Europe, and
their political children found methods of internationalist extractions for raw goods, be they coffee

or ore or oil, the Soviet system by way of deliberate isolations found poverty of spirit which

defied the times. With one eye on modernity, and one on stubborn disavowance of colonial

imperial globalization, the Soviets found ways to make their own colonial reserves, deliberate

and separate, and to restrain the growth of desire through propaganda control. Where American

empire assaults the mind with catastrophically invasive advertising visions, the Soviet system

sold denial and modesty as a cultural ideal. With abundant shortages and the defiantly thriving

black market resource network, the system strove to find balance.

Incentivizing production is a more direct way to deal with the many effects of shortage. The

intricasies of our modern machines cannot be dealt with solely by pacifying demand, especially

in the increasingly self-aware internationalist sphere of intellection and media, now collectively

internet. As managers of firms might exercise better inventory control, stockpile reserve

resources, and implement strategically consistent production pace, any reward they might

receive would be helpful to the overall psychology of panic accompanying shortages, especially

as they effect the essential necessities. If broadband service were to fail, or the smart phones

to go out of stock, one can imagine the panic. As the steady regulation of advertising, desire/

demand creation, supplies, and the movement of profit to the private investors is a delicate

symphony, so then within the socialist system, the impurity of introducing an incentive basis into

controlled output actually verges on fusionary approach between market systems and social

systems.

As faith of the populace crumbles with the banalities of automobile failures or home

appliance defects and missing parts, then essential it would seem, to balance the effects with

the hidden incentivization of resource management, to achieve the ideological utopianism of a

steady supply of goods which placates the populace against dreams of regime change.