Socialism: Trials and Errors

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order into the economy. Most argue that controls or central planning will lead to increased output, more equitable distribution of goods, and a concentration of resources in socially useful production. Explains Claude Estier, a national secretary of the French Socialist Party: "We consider it necessary to direct the economy toward the general interest rather than toward the interests of a small number of capitalists."

With their Five-Year Plans and all-embracing command of industry and agriculture, Communist states can point to many significant achievements. Especially dramatic have been the economic gains of the Soviet Union; in six decades a war-shattered society in the earliest stages of industrialization has been transformed into a military superpower that produces more steel, crude oil, manganese and honey than the U.S. Another Marxist-Leninist state, East Germany, now ranks as the world's 17th industrial power (measured by gross national product), while China's Communists seem to have banished the specter of recurring famine.

There are, however, serious flaws in the Marxist-Leninist economic system. Communist countries say they have abolished unemployment—but at the cost of heavily overstaffing every office and factory with workers who seldom can be fired for failing to produce. Bureaucratic controls further cripple efficiency, and managers have little leeway for innovation. Consumer goods are still shoddy and chronically scarce. Long lines form immediately in Warsaw, Prague, Havana, Moscow and other Communist cities at rumors that a shop is about to receive a shipment of such coveted goods as shoes, fresh fish or fruit. Communist leaders boast that their citizens are immune to inflation; but, in fact, continual price hikes are merely artfully concealed by an economy in which wages, prices and even the kinds of goods available are set by the state. For instance, the "official" cost of an item can remain stable for years, but the product may be available only on the black (or gray) market and at a substantial premium.

One problem that virtually every Marxist-Leninist state faces is lagging agricultural output. Almost invariably, collectivizing or communalizing farms deadens initiative. Food productivity thus remains low, despite enormous investments in farm machinery and irrigation systems. Although 85% of Poland's farm land remains in private hands, output is poor because low official prices provide no incentive for the farmer to work harder.

Yugoslavia seems to have the fewest economic problems among Marxist-Leninist states. It also has the least rigidly controlled economy in Eastern Europe, although Hungary is also testing innovative ways. Much Yugoslav economic planning and management has been decentralized. Initiative, hard work and quality output have been rewarded with generous bonuses and wage hikes. As a result, Yugoslav plants vastly outperform the state-owned enterprises in most other Communist-ruled countries. They also turn out an abundance of consumer products that make Belgrade, Zagreb and other large Yugoslav cities look more West European than Balkan.

Because social democrats have mostly come to power in industrially advanced and politically democratic nations, they have been cautious in their efforts to change existing systems by, for example, nationalizing economies. Says French Socialist