Comparative Econ Midterm -3

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Christian ideas of the Second Coming of Christ and apocalyptic end of the world as described in the Book of Revelations of the Bible. Millennarians see this happening soon and may call for revolutionary political, social, or economic changes, as with the Münster uprising in Germany in the early 1500s.
Seen as an origin of socialist ideas in Europe.

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Millennarian Tradition

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Label used by Karl Marx and Friedrich Engels to denigrate their socialist predecessors such as Claude Henri de Saint-Simon, Robert Owen, and Charles Fourier. Argued that the focus of utopians on small communities did not deal with the problems of all of society.

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Utopian Socialism

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Idea that social planners can plan society rationally, originally a French concept proposed by the utopian socialist Clande Henri de Saint-Simon. Severely criticized by Friedrich Hayek as the “fatal conceit.”

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Social Engineering

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Utopian socialist communities in which there would be complete sharing, including sexual sharing, as envisioned by Charles Fourier in the 1830s. Also called phalanxes.

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Phalansteries

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Villages and farms in Iowa established in the early 1880s by egalitarian German Pietists who owned the property communally until the 1940s, when their technological innovations, including Amana microwave ovens, were bought out by U.S. corporations. The most successful U.S. utopian socialist community, now a tourist attraction in Iowa.

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Amana Farms

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First major trade union in Britain. Led initially by the utopian socialist Robert Owen, it covered all workers in the 1830s.

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Grand National Consolidated Trades Union

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Communal production units, usually farms, in Israel. Founded in the early days of Zionist immigration by Eastern European Jews influenced by utopian socialist ideals. Now gradually becoming more market oriented.

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Kibbutz

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Analyzing systems or processes as wholes rather than examining their individual parts. Dialectical approach considered to be holistic. Argued by some to lead to authoritarian and totalitarian political views.

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Holistic System

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Idea that conflicts of unified opposites drive dynamic processes. Applied to history by the nineteenth-century German philosopher Hegel and later by Marx, who saw conflicting classes as the opposites.

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Dialectic

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Primary argument in dialectical analysis, opposed dynamically by its antithesis.

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Thesis

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The opposite of a thesis, a primary reality. In Hegel’s dialectical theory, these oppose each other in a dynamic unity that drives history. The conflict of thesis and antithesis generates a synthesis.

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Antithesis

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In dialectical theory, the new form that results eventually from the conflict of the opposed thesis and antithesis. For Marx, a new mode of production arising out of class conflict in the previous mode of production.

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Synthesis

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Ideas stated by Karl Marx.

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Marxian

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Ideas influenced by Marx’s thinking, even if not exactly in agreement with what he actually said; thus contrasts with Marxian.

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Marxist

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French, originally meaning “wealthy living in cities.” According to Marx, the ruling class of capitalism that owns the means of production and oppresses and exploits the working class, the proletariat.

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Bourgeoisie

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Marxian term for the industrial working class, taken from earlier French discussions such as those of Pierre Joseph Proudhon. Posited by Marx to rule under socialism.

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Proletariat

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Doctrine of the Communist Manifesto, by Karl Marx and Friedrich Engels, that history is driven by class struggles over control of the means of production, with slavery followed by feudalism followed by capitalism, which was to be followed by socialism and eventually communism.

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Historical Materialism

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In Marxian analysis, the technological substructure of the economy that combines with the relations of production (relations between classes) to determine the mode of production. Conflicts between the forces and relations can change the mode of production.

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Forces of Production

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In Marxian analysis, the relations between classes in terms of production. Combined with forces of production, it determines the mode of production.

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Relations of Production

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Marxian term for the nature of the economic system, characterized by its technological base (forces of production) and its class relations (relations of production). Intense class conflict changes the mode, as in the change from feudalism to capitalism.

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Mode of Production

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Extension of historical materialism and dialectical analysis to all fields of knowledge, including science, with controversial results in studies of genetics in the USSR by Lysenko. Term originally due to Plekhanov.

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Dialectical Materialism

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According to Marx, the experience of not owning the means of production one works with; separation from the means of one’s survival and thus under the control of the owner of those means. Modern usages focus on psychological feelings of distance, that is, of not identifying with those nearby.

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Alienation

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In Marxian analysis, the ratio of constant capital to the sum of constant capital and variable capital. The rise of this ratio causes the rate of profit to fall.

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Organic Composition of Capital

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Marxian concept measured by the ratio of surplus value to variable capital, usually interpreted as the percentage of a worker’s time spent producing profit for the capitalist. Marx argued that the rate of exploitation would rise as the profit rate fell, thereby intensifying class conflict.

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Rate of Exploitation

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In Marxian analysis, the ratio of surplus value to constant plus variable capital. In more standard economic analysis, the amount of profit divided by the amount of capital.

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Rate of Profit

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Doctrine originally stated by the German Social Democrat Eduard Bernstein at the end of the 1800s that capitalism would not collapse and that therefore a reformist approach within parliamentary democracy should be pursued by the working class. Was strongly criticized by Marxist-Leninists and became a term of opprobrium in later Communist regimes.

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Revisionism

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Idea among Marxists that capitalism did not collapse by the end of the 1800s, as forecast by Marx, because of European imperialism, which allowed European workers to be bought off. Thus, the socialist revolution would occur in the hinterland rather than in capitalism’s core. Strongly advocated by Lenin and a key part of the Marxism-Leninism doctrine.

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Imperialism Thesis

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Marxism as modified by Lenin, the leading ideology of the Soviet Union. Replaced Marx’s prediction that capitalism would fall in the most advanced countries with the view that it would happen on the imperial periphery. Also rejected democratic ideas of Marx in favor of leadership by a vanguard of the Communist Party.

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Marxism-Leninism

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Russian for “majority,” historically identified as a group in the early 1900s in the Russian Social Democratic Labor Party led by Vladimir Lenin that advocated control by a vanguard group and eventually led the Russian Revolution of 1917.

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Bolsheviks

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Russian term for “minority,” the name for the faction of the Russian Social Democratic Party ousted by the Bolsheviks. Supported a more democratic approach than the Bolsheviks, who would lead the Russian Revolution.

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Mensheviks

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Revolutionary government in Paris during 1870–1871 and violently suppressed at the end of the Franco-Prussian War. Served as inspiration for later socialist and communist movements.

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Paris Commune

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From a Greek term meaning “no ruler,” that is, that there should be no government. Advocated in the late 1700s by William Godwin, a view advocated by some on both the extreme Left and Right.

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Anarchism

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Anarchist movement advocating rule by labor unions. Very influential in France and in several Latin and Latin American countries.

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Syndicalism

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International Communist group founded and led by Karl Marx in the 1860s. Dissolved by him in 1872 after the anarchist Mikhail Bakunin appeared to be on the verge of taking control.

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First International

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International Communist organization founded by Leon Trotsky after his exile from the Soviet Union in 1929. Competed with the dominant Third International, the Comintern, led by Stalin.

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Fourth International

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Idea of Leon Trotsky that for the socialist revolution to succeed, it must occur throughout the world simultaneously. Caused part of the split with Stalin, who advocated “socialism in one country,” the Soviet Union.

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Permanent Revolution

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Political movement in advanced capitalist countries during the 1960s. In the United States it focused on opposing the war in Vietnam using alternative Marxist views.

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New Left

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System in Yugoslavia from 1950 to 1990 to some degree. Workers supposedly managed state-owned enterprises.

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Worker-Managed Market Socialism

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Intensive effort from 1958 to 1961 in China under Mao Zedong to develop rural-based industry and full communalization of agriculture. Led to massive famine, with up to 30 million dead.

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Great Leap Forward (GLF)

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Chinese movement under Mao Zedong from 1966 to 1969, although not formally ended until 1978, to purge society of culture from the pre-Communist period and to attack entrenched bureaucrats and “capitalist roaders.” Carried out mostly by youthful Red Guards.

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Great Proletarian Cultural Revolution (GPCR)

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Spanish for “Shining Path,” name for the Communist Party of Peru–backed guerrilla group led by Abimael Guzman (“Gonzalo”), who took a radically Maoist approach. Since Guzman’s arrest in 1993, the group has sharply declined in influence and power, although it is still not completely eliminated.

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Sendero Luminoso

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Debate over the possibility of using central planning to manage an economy
rationally and efficiently. Advocates of central planning in the controversy included Enrico Barone and Oskar Lange. The main critics were leading Austrian economists, Ludwig von Mises and Friedrich Hayek, who argued that incentive and information problems were insurmountable except by using capitalist markets.

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Socialist Planning Controversy

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Market socialist policy introduced in Hungary after 1968 that ended central command planning. Led to foreign indebtedness as soft budget constraint problems emerged.

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New Economic Mechanism (NEM)

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Concept stated by the Hungarian economist János Kornai, said to be especially serious for market socialist economies, where uncontrolled state-owned enterprises waste money and run up large debts on the expectation that the state will support them. The opposite of a hard budget constraint, in which firms that waste money will go out of business.

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Soft Budget Constraint

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Label used by Chinese Communists to describe their particular version of market socialism.

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Socialist Market Economy

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Important form of firms in the current Chinese economy, owned by
local units of government but operating in a free-market context—the Chinese version of market socialism. Many of these enterprises are undergoing reorganization and restructuring, with some becoming cooperatives and others increasingly resembling standard capitalist firms.

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Town and Village Enterprises (TVEs)

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Market socialist policy introduced in Hungary after 1968 that ended central command planning. Led to foreign indebtedness as soft budget constraint problems emerged.

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New Economic Mechanism (NEM)

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Market-oriented policy for agriculture and small enterprises in the Soviet Union during 1921–1928. Established after famines occurred at the end of War Communism, then displaced by Stalinist command central planning.

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New Economic Policy (NEP)

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Method of central planning based on keeping track of quantities of materials being used in the economy and making sure that supplies are in balance with demands.

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Material Balance Method

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The central planning agency of the Soviet Union, disbanded in 1991.

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Gosplan

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The plan formulated for an enterprise in the Soviet Union, specifying technical, output, and financial aspects, including investment and output levels as well as
employment, wages, and prices.

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Techpromfinplan (Technical-Production-Financial Plan)

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Phenomenon in command planned economies where an enterprise’s production quota rises with its production, thereby discouraging firms from exceeding their production quotas.

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Ratchet Effect

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From Russian word “shturmovshchina.” A practice in command planned economies wherein enterprises engage in frenzied last-minute efforts to meet a monthly production quota, often resulting in poor quality of output.

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Storming

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Modeling the economy by estimating the quantities of particular inputs that are needed to produce particular outputs, as summarized in an input-output matrix. Used by central planners and in linear programming optimization.

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Input-Output Analysis

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Mathematical method for optimizing the allocation of inputs to maximize an objective function subject to constraints, with crucial relations given by an input-output matrix.

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Linear Programming

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Same as a labor- or worker-managed economy, although sometimes argued to involve other parties, such as consumers, in consultations.

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Participatory or Cooperative Economy

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Economy in which workers have authority over management, argued to have existed in Yugoslavia. The term was favored by Jaroslav Vanek, but was also known as a participatory economy or a worker-managed economy.

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Labor-Managed Economy

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Rights to use land or other property, even without necessarily owning it, as with the Chinese household responsibility system.

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Usufruct Rights

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Search for an alternative to capitalism and socialism. Fascism claimed to be a Third Way, as do the social market economies and New Traditional Islamic economies.

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Third Way

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Enterprises owned by workers. There are also cooperatives of consumers and other parties.

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Cooperatives

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Method of worker ownership popular in the United States, with stock owned by workers’ pension plans.

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Employee Stock Ownership Plans (ESOPs)

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View of transition and adjustment to financial crises held by policymakers at the International Monetary Fund, the World Bank, and related U.S. government entities in Washington, D.C., such as the Treasury Department and the Federal Reserve. Critics accuse followers of the Consensus of applying a “one size fits all” approach to all crises, encouraging restrictive macroeconomic policies and U.S.-style markets.

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Washington Consensus