Russia: Looking Backward

Some two years ago, Kharkov Professor of Economics Evsei Liberman startled the Soviet establishment with a Pravda piece urging a switch from rigid, centralized Marxist planning to Western-style profit guidelines for factories. As Liberman saw it, factories would produce only what retail stores could sell. The proposal was more pre-revolutionary than revolutionary, and it touched off a storm of protest from orthodox Marxists.

But Nikita Khrushchev was impressed and decided to give Libermanism a chance. One factory in Moscow and another in Gorky were put on the profit and free-market system on a trial basis six months ago. Not surprisingly,...

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