Bureaucracy as a replacement for market under Real Socialism

Real Socialism requires abolition of free markets, except in some niches. Bureaucrats take over as the ultimate force of economic decision-making

Once the Communists destroyed private ownership on the means of production—just like Karl Marx envisioned it—the market disappeared, along with independent economic players. The dynamics of demand and supply ceased to exist. Something had to take their place.

Bureaucrats substitute markets

State bureaucrats took their place. They decided what, when, where and by whom things should be produced, based on the “scientific Marxist principles of economic planning”.

Bureaucrats decided what, when, where and by who things should be produced, based on “scientific Marxist principles of economic planning”. Other bureaucrats decided who and where should get these things, based on “guidelines and principles of directing the Soviet society”, formulated by the Communist party.

Lines substitute dynamic pricing

Most of the time, there was not enough of these things for everyone— much like in today’s Venezuela or Cuba. The explanations given for this were “particular errors in management”, or “deficiencies of people’s conscientiousness” (i.e. people consuming more than the system could deliver), or actions of “hostile class elements” (hoarding, stealing, speculating).

The universal solution to the deficit of nearly everything were lines. The lines were ubiquitous: if you weren’t willing to wait for things long enough, you didn’t need it as much as the others who were. The typical waiting time for a new Lada car was 5–10 years, for a larger apartment to your larger family 10–20 years.

Economy of perks

The scientific Marxist management of society required selective distribution channels for the most valuable members of society. For example, members of “nomenklatura”, or the positions that required personnel vetting by the Communist Central Committee, could purchase goods at so-called “section #200” where they had access to consumer imports and other things in limited supply.

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