Full text: Some Comments on the Politics of Full Employment.

their western collegues. Even more relevant in this context is the 
fact that there exists actually no adequate theoretical basis for 
the reform policy. There is no answer to the question how 
government economic policy or planning and direction on the one 
hand and decentralisation, individual initiative, spontaneity and 
judgement on the other are to be combined, reconciled and made 
compatible so as to lead to an equilibrated and workable system. 
In a microeconomic form this problem is at least partly reflected 
in the "critical question how much decision powers are to be 
attributed to the enterprises" ( a question raised but not 
answered in the resolution of the Chinese Communist Party in 
October 1984, quoted from Sylos Labini 1986 p.116). Since there 
exists no guidance in this respect the reform is likely to be 
either so timid that it will not ignite the initial spark or, if 
it has done so, it will tend, in the fervour of success, to 
discard all controls. 
The reform in those countries will therefore probably have the 
consequence that they loose control over both investment and 
consumption,having no means of effective control over either 
labour market or prices nor over the global volume of investment. 
As a result they have no means of restraining the boom when it 
threatens to get out of hand as it surely will once the decontrol 
has succeeded in creating an optimistic atmosphere with 
proliferation of small enterprises, rising real wages and an 
accelerating process of accumulation. The system will bump against 
the ceiling,prices will overtake wages and a profit inflation will 
emerge. This result will be the more likely in countries which 
still have a large share of agriculture as in China. It is however 
generally to be expected in socialist countries owing to a bias 
towards expansion and growth,and perhaps also because they lack
	        

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