Economic systems December 28, 2012Posted by Tomboktu in
Capitalism, Communism, Economics. Around the time of the Soviet
collapse, the economist Peter Murrell published an article in
the Journal of Economic Perspectives reviewing empirical studies
of efficiency in the socialist planned economies. These studies
consistently failed to support the neoclassical analysis:
virtually all of them found that by standard neoclassical
measures of efficiency, the planned economies performed as well
or better than market economies. First he reviewed eighteen
studies of technical efficiency: the degree to which a firm
produces at its own maximum technological level. Matching
studies of centrally planned firms with studies that examined
capitalist firms using the same methodologies, he compared the
results. One paper, for example, found a 90% level of technical
efficiency in capitalist firms; another using the same method
found a 93% level in Soviet firms. The results continued in the
same way: 84% versus 86%, 87% versus 95%