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Socialist Economics
Socialist economics refers to the economic theories, practices, and norms of hypothetical and existing socialist economic systems. There are elemental characteristics of the socialist economic system that distinguish it from the capitalist or market economy: The socialist economic model is greatly characterized by the government’s central planning. As well as the social ownership of the means of production, ideally society would be the owner – but in practice the state is the owner of the means of production. If the state is the owner, the idea is that they would work for the benefit of society – of the working class. In practice, the society is the owner only in theory and the political institutions governing society are completely set up by the people.
 * The communist party has a concentration of power in representation of the working class: the party’s decisions are so integrated into public life that it’s economic and non-economic decisions are part of their overall actions.
 * Social ownership of the means of production: natural resources and capital belong to society.
 * Central economic planning: this is a main characteristic of a socialist economy, the market is planned by a central government agency – generally a State Planning Commission.
 * Socially-equitable distribution of the national income: there are goods and services provided for free by the state that supplement private consumption.

Centrally Planned Economies
In a centrally planned economy there is a central planning authority, usually named the State Planning Commission, which is in charge of acting within the framework of social goals and the priorities designated by the party. The planning was done under the idea that leaving market indicators would allow for social advancement. The central planning authority is responsible for five specific tasks: The planning process involved the creation of one-year plans, five-year plans, and long-term plans. The one-year plans contained schedules and details, they addressed current production and market equilibrium issues. The five-year plans integrated the political, military, and economic strategy that would be pursued in the next five years, as well as changes in capacity and production rates. It was done by a team of around the fifty leading experts from all the departments, ministries, professional, and scientific organizations. The long-term plans encompassed a global strategy development. This plan was about goals for the state and society, not about individual responsibilities. Structural changes were a main theme.
 * Determining the criteria for the economic calculations of the planning decisions.
 * Determining and quantifying targets to be achieved within the a specified period
 * Coordinating targets to ensure the plan is consistent and reliable
 * Determining the methods to ensure the realization of the plan
 * Revising targets in accordance to changing economic calculations

Soviet Economics
The essence of Soviet economics is that the communist party is the sole authority of the national interest. The party makes all the decisions, but they should take into account the desires of the population – these desires then were to be weighted into the decision making. The main goal of the Soviet Union according to article 11 of its constitution was to “raise the material and cultural standards of the working people”.

Marxist thought and its interpretation by the Soviet Union dictated that private ownership was to be banned, the nationalization of all aspects of production was a necessity. Yet some things were not nationalized for the sake of economic efficiency or production targets. There was an emphasis on rapid industrialization, the development of heavy industry, relegation of consumer production as non-essential, and collectivization of agriculture. As well, Soviet style economies use a larger proportion of their resources on investment than do free-market economies. The issue with this is that current consumption is undercut because of the over-investment. All these actions support the purposes of the state, not the people.

Despite the attempts of the Soviet Union to guarantee employment to all of its labor force, communist theory did not satisfy the human desires of its laborers. Because, “people want land, not collectivization. Consumers want goods, not gigantic industrial enterprise. Workers want better wages and higher living standards, not citations and medals. [And] an economy cannot be politically tailored to perfection.” A main problem of the Soviet Union was it pushed agriculture to the bottom of its priorities, and that its central planning scheme inhibited technological innovation. The Soviet Union had a poor overall performance, even though it had high growth rates in productions, many enterprises operated with losses.

Eastern Europe Economics
The initial move for socialism was in 1963 after a Central Committee meeting, these countries became the Comecon  countries.. There were countries that chose to introduce the new economic system gradually, those were Bulgaria, Poland, and East Germany. There were countries that decided to first prepare theoretically, then experimentation at different levels, and then in a large scale, those were Hungary and Romania. Czechoslovakia is set apart because the first stage of its transition consisted of economic recovery and then socialism was gradually implemented. Yugoslavia differed from other Eastern European countries in that after 1950 it modified its economic system by making self-management the base of enterprise activity.

There are few differences between the economic model of the Soviet Union and Eastern European countries such as Poland and East Germany. Czechoslovakia and East Germany were administered along regional lines. Poland retained a centralized system similar to the Stalinist centralization of the Soviet Union. The Eastern European countries differed from the Soviet Union in that they had greater flexibility in the management of subordinate firms, the market was assigned a greater importance, accessible foreign trade, and “liberalization of the exchange of capital goods”. As well, there was less bureaucracy than in the Soviet Union involved in the planning of the countries.

Maoist China Economics
The Maoist China economic model was designed after the  Stalinist principles of a centrally administered socialist economy.

Mao condemned Stalinism at the Twentieth Congress and the flaws in the communist movement that peaked with the Hungarian rising. This gave Mao space in which to experiment with departure from the soviet socialist economy. The Maoist economic model was reliant on High Tide of Socialism in the Chinese Countryside, How to Handle Contradictions Among the People, and Ten Great Relationships. Mao modeled the Chinese socialist economy in such a way that it led to the 1958 Great Leap Forward and the Commune Movement.

In High Tide of Socialism in the Chinese Countryside Mao focused on the industrialization and mechanization of the countryside; in How to Handle Contradictions Among the People he wrote about his thoughts on the problems of socialist states, as well as the conflicts of interest in the Chinese socialist society. In Ten Great Relationships he wrote about his vision of China’s economy.

Maoist China had a dual economic goal, the industrialization of the countryside and the “socialization” of its people. It differed from the Soviet Union’s goals in that Mao emphasized the class struggle against the bourgeois class. China allowed for more flexibility and experimentation that the Soviet Union, as well, the countryside is at the center of its policies.

Systematic Challenges of Socialist Economics
The problem with the central planning of socialist economies is that as the state develops it grows in complexity and the possible errors grow and the possibilities of dis-allocations and waste of resources. As commented by Marx, capitalism works because it is a system of economic force. But in socialist economics this force is insufficient to provide enough incentive. Human needs should be taken into account to make a socialist society function. But there is no necessary connection between the accumulation of capital and human satisfaction. Some of the issues that emerged during the Socialist phase of Eastern Europe, the Soviet Union, and Maoist China, were:
 * Inflation – for example, Yugoslavia raised from 1964 to 1965 its industrial prices by 17% and its agricultural prices by 32%; Czechoslovakia in 1966 raised the prices of foodstuffs and services by 20%, by 1967 prices were up by 30%.
 * “Lagged” Consumption – There was a lag between when products were fabricated and when they were accessed to by the population, goods tended to stockpile. Also, the production of consumer products diminished, for example in Yugoslavia the share of consumer products fell from 70% before World War II to 31% in 1965.
 * Fixing Prices – Prices were fixed under the premise that it would force producers to behave more efficiently, instead the price-controlled products were produced in lower quantities. In Yugoslavia, the market distortion cause by the price fixing was realized, and led to the un-freezing of prices in 1967. Hungary also had frozen prices, they slowly un-freezed them over a period of 10 to 15 years because otherwise the structural disproportions of the Hungarian economy would spin prices out of control.
 * Production Structure – Many factories were kept running through government subsidies and protection, despite any economic losses of the factories. This decreased overall efficiency of the socialist economies and also increased the financial losses of those economies.
 * Unemployment – The socialist economics had a disproportionate amount of available jobs and manpower. As written by Ljubo Sirc, “[…] The Soviet Union and other communist countries have the worst of both worlds: some enterprises or operations are inefficient because they are too capital-intensive, other enterprises or operations because they are too labour-intensive”.

The Stalinist economic model in which the socialist economies were based did not allow for a decrease in growth rates. It did not allow for the flexibility needed to keep up with growing economies. 