Shortages of consumer goods

[Robocommie]

For sometime now I've been looking into the Soviet economy and it's workings, it's strengths and it's weaknesses, ideally in order to work out an economic theory that can eradicate the weaknesses without also abandoning the strengths. In any case, one issue continues to puzzle me; the rampant shortages that occurred in the Soviet Union, particularly in the 1980s, but at other times as well. In particular I was reading about how in the 1960s, Russians often had to take a train to Moscow, sometimes traveling for hours, in order to purchase meat. There was an old Soviet-era joke, A man says to a butcher, "Do you have meat here?" "No," says the butcher. "Here we don't have fish, it's the other shop that doesn't have meat."

What causes this? And what can rectify it?

Presently the situation in Russia, after the transition to a capitalist market economy, is one in which the stores have plenty of goods on the shelves, but people can't always afford to buy them, and in fact, people often have to go without.

Both are problems, but if the two could be resolved, that is, if there is plenty of supply, but also plenty of affordability, perhaps through price controls, the situation would be ideal.

[Saorsa]

If there are shortages, make more. I suppose the only way to deal with shortages is to make abundance universal in a post-scarcity socialist society. With the technology of the entire world unleashed that shouldn't be too hard.

[ComradeOm]

I noted the two main causes of shortages in the Soviet economy here (http://www.revleft.com/vb/showpost.php?p=1254978&postcount=3)

[Uppercut]

As far as I know, the local soviets collect the data and planning into and send them to the regional soviets, and so forth. Unfortunately, this does leave quite a bit of room for error and corruption, so I'm guessing this is a major reason why anti-bureaucracy campaigns are necessary in socialist societies. Plus, the people could always write requests and whatnot to their local representatives or even talk to them directly if there is an economic shortage in one area or the other. What good are party members if they don't pay attention to the people?

[Invincible Summer]

I think modern technology - especially the ones utilized by capitalism right now in businesses to account for inventory, etc - would help prevent corruption and inefficiencies.

With specific usernames and log-ins, it'd be easy to see who has tampered with data and counts, etc.

[Uppercut]

I think modern technology - especially the ones utilized by capitalism right now in businesses to account for inventory, etc - would help prevent corruption and inefficiencies.

With specific usernames and log-ins, it'd be easy to see who has tampered with data and counts, etc.

Good point. When you think about it, every business is essentially a centrally planned economy. The only difference is that the managers and CEOs use it for profit.

[Robocommie]

Good point. When you think about it, every business is essentially a centrally planned economy. The only difference is that the managers and CEOs use it for profit.

It's true, though as anyone who has worked in the corporate world will tell you, the bureaucratic dumbfuckery and inefficiency can be mind-numbing - it's why Dilbert is a funny cartoon strip. This is more true the larger the corporation gets - more people are expected to coordinate more subordinates that they never have personal face-to-face contact with and manage locations they never personally go to.

Recently I read an article on the Soviet industrial system, which was written only a few years ago using recently opened archival sources. It seems the system operated with very little flexibility in it's lower echelons - information did not flow up as much as orders flowed down. If there was a problem with production, like a lack of sufficient resources or infrastructure problems, the higher-ups didn't want to hear about it. It was assumed that a good manager would solve problems as they presented themselves, which didn't always work.

[chimx]

What causes this? And what can rectify it?

An inability to accurately predict consumer demand.

[Sperm-Doll Setsuna]

On this subject, I recall reading an article by some Hungarian free-marketeer, János Kornai was his name, who wrote a series of books ("Economics of Shortage" and "The Socialist System: The Political Economy of Communism") and articles arguing about the "shortage economy" being the "inevitable" conclusion of any attempt to plan an economy and being systemic problems arising from Marxism or something.

I forget what the actual argument was, it was long ago. I'd be interested in any possible refutations of these works.

[FSL]

An inability to accurately predict consumer demand.

It' very easy to predict what's enough, it is probably impossible to produce it.



For sometime now I've been looking into the Soviet economy and it's workings, it's strengths and it's weaknesses, ideally in order to work out an economic theory that can eradicate the weaknesses without also abandoning the strengths. In any case, one issue continues to puzzle me; the rampant shortages that occurred in the Soviet Union, particularly in the 1980s, but at other times as well. In particular I was reading about how in the 1960s, Russians often had to take a train to Moscow, sometimes traveling for hours, in order to purchase meat. There was an old Soviet-era joke, A man says to a butcher, "Do you have meat here?" "No," says the butcher. "Here we don't have fish, it's the other shop that doesn't have meat."

What causes this? And what can rectify it?

Presently the situation in Russia, after the transition to a capitalist market economy, is one in which the stores have plenty of goods on the shelves, but people can't always afford to buy them, and in fact, people often have to go without.

Both are problems, but if the two could be resolved, that is, if there is plenty of supply, but also plenty of affordability, perhaps through price controls, the situation would be ideal.


I haven't seen any study claiming that people in USSR didn't eat well. I remember reading that per-capita consumption of basic foodstuff was higher than in the US with the exception of meat but that could be attributed to the unhealthy diet that started dominating in other countries.

In any case, let's assume that periods of shortage and periods of abundance formed an annoying cycle that made people queue when products did came. This is a result of the extremely low, subsidized prices that "encouraged" the buyer to get more.

As long as there are prices and money circulation, we could do what countries used to with their currencies. Instead of having a fixed rate at all times, they allowed some amount of "floating" around a price. So, if the currency was 8% higher/lower than its target price, the state wouldn't act. If it went 11% off the target it would go on and enact the corresponding monetary policy.

So for example the central plan would set a target price for shoes. This would be the price all shops would sell but if demand exceeds current supply, then they'd have the option of raising the price within a pre-approved limit, thus smoothing out any spikes in demand.
This offers to the workers in immediate contact with the consumer some freedom without changing the character of the production and without making basic goods overly expensive.

This only makes sense in a socialist economy though. If the profit motive is around and workers control absent, companies could just stock a product hoping to raise its price and get more money. As it often happens.

[bie]

Some deficiencies of central planning originated from the high computational complexity of coordination of millions of variables, from different branches etc. It was all made by hand, by skilled economists. Therefore it was subjected to a high degree of subjective error, also to all sort of abuse. Today, the technological progress found an easy solution for this limitation. If computers could be applied to a central planning mechanisms, imagine how it could improve its efficiency, decrease costs etc. - and how many problems could it resolve. With application of modern technologies, central planning would be even much more successful! :)