From Mikhail Gorbachov's memoirs:
The costs of labour, fuel, and raw material per unit of production were two to two and a half times higher than the developed countries, while in agriculture they were ten times higher. We produced more coal, oil, metals, cement and other materials (except for synthetics) than the Unmited States, but our end product was less than half that of the USA.
And that is, note, valuing Soviet production the way the Soviets did: way, waaay, too highly.
This is what the absence of markets does to you over 70 years of compounding. Or of not compounding if you prefer, talking about the small but continual improvements in efficiency markets bring us each and every year.
We can get all theoretical about this, invoke Hayek and insist that knowledge is local and that the centre can never plan in sufficient detail to make those little incremental steps which so contribute to that increased efficiency. We can get all empirical and simply note what did in fact happen in those economies without markets. We can even get all bolshie and simply insist that we'll do things our way, as free people, rather than being automatons programmed by the Man in Whitehall.
But the takeaway argument is that we really do want markets in everything. Yes, in education, higher education and even in health care. We might well want to have "markets light", with State financing, we might well desire (I certainly do) a welfare safety net underneath it all, but we really do want those markets so that we get, as we did over the last century, that ever increasing efficiency of production.
You know, efficiency, that essential and basic desire of lazy and greedy human beings everwhere: the most we can get out of what's available.
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.