ECON-E 201 Lecture Notes - Lecture 11: Price Controls, Price System, War Communism
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Econ-e201 lecture 11 the price system (continued) and price controls. Socialism: government ownership and control of the distribution of goods. So, how to build a railroad without rational economic cost. However, there is no opportunity cost as well (no difference in cost of materials in socialism: with socialism, you"ve eliminated information about opportunity cost. Thus you have no way of knowing how much to produce for a particular project. Socialism switched to market socialism after hearing this way of thinking. Soviet union: used prices but still maintained planning/centralization. Samuelson: thought that eventually the soviet union would surpass the united states in production. Does not mean the soviets were not good at producing some things: were good at some scientific advancements during cold war and military goods during wwii. Successfully came closely to marx"s idea of socialism. Production in every single sector fell (sometimes to zero)
