Some Problems of Socialism

It will be of interest to know how Soviet Russia has tackled the various economic problems:  Private property. Private property in the form of a house, a car, a few animals and other consumers’ goods is allowed. A man is free to buy government
bonds or securities. He can keep to a deposit in the bank. Property up to the amount of 50,000 roubles can be transmitted by inheritance. nut living on unearned income is discouraged and all unearned income is subject to very heavy taxation. Only bourgeois property which is the result of exploitation, is sought to be abolished. Pricing System, Under the free-enterprise, competitive and individualistic system, the pricing system automatically solves the major economic problems. Some economists, however, notably Mrs. Hayek and Robbins, are of the opinion that rational accounting is impossible under a socialist regime and that it is all groping in the dark. But there arc other economists like Pigou who do not see any difficulty in this Dickinson and some other economists are of the opinion that the capitalist apparatus of marketing and pricing can be retained in socialism.

Russians have been able to fix prices of the goods. Costs of raw materials and wage, transport and all other costs are added and then a small percentage for a little profit. This give a selling price. It is a little arbitrary. price do not reflect the intensities of consumers’ demand. although some note is taken  f the relative arcities. nut, in a socialist society, prices of good will be low enough to clear the available supplies and also high enough to cover the socially marginal costs of production. The price under socialist planning need not be market price as under capitalism. It is purely a book-keeping or  accounting price set by the planning authority.In recent years, however, the crude quantitative goods in the physical units are being replaced by profitability criteria of performance  By this process of economic valuation socialism seems ‘to be  moving In the direction of capitalism,Suppl) of Labour and Wages. There is ho freedom of choice of occupation. There are also ample facilities for technical training. The Government is prepared to bear the cost of training on the condition that the trainees, after completing training, work in government factories for a term of years on conditions settled beforehand. Money wages arc paid and there are variations according the ability efficiency.

Standard wages arc fixed after a thorough ludy and time-study in order to ascertain thc_standard time required for a job. Efficiency premia are paid to better workers who take less time. Wages are also supplemented by the payment to the workers of a lump-sum social dividend payment. This payment v.u ics with the size composition and health status of the family. I3y means of such payments, inequalities of income and mitigated. If there is a comparative shortage of some type of labour, higher wages are of course offered to attract the right type and sufficient supply of labour.  Workers arc assigned definite jobs. The workers could also be transferred from one place to another just like government servants. The government tries to adjust supply to demand.

Wagl·s. The system of setting accounting prices  labour. as in the case 01″ other productive resources will not 00. for the amount of labour is not a fixed quantity. People can choose their occupation and they can also choose whether to work more or work Icss, i.e., whether to prefer income or leisure. Hence, it is essential to have a system of actual market wages rather accounting wages. These ‘rates according to the agreeableness or disagreeableness of the job, possibility of supplementary earning, training or skill required to do a job, productivity of individ~a1 workers, etc. Marginal productivity will determine the wage.