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Centrally Planned Economies: Theory and Practice in Socialist Czechoslovakia

Author(s):Židek, Libor
Reviewer(s):Swain, Nigel

Published by EH.Net (May 2022).

Libor Židek. Centrally Planned Economies: Theory and Practice in Socialist Czechoslovakia. London and New York: Routledge, 2019. xiii + 257 pp. £29:59 (paperback), ISBN 978-0-367-72862-5.

Reviewed for EH.NET by Nigel Swain, Department of History, University of Liverpool.

 

It is difficult to know how to react to this work. Books on central planning in Eastern Europe are a rarity, so it is to be welcomed on those grounds. Czechoslovak central planning does not figure greatly in the literature because, discounting the blip associated with the Prague Spring, it scarcely reformed its economy, so a book on Czechoslovak central planning is doubly welcome. The book is unique in including interviews with individuals involved in the planning process. Furthermore, a generation of students for whom Eastern European-style socialism is an unknown universe could potentially learn much from the sections of boxed text that provide concrete illustrations of more abstract discussions.

But Židek has been poorly served by his publishers. This is a book by Czechs, for Czechs, written in Czechish. Little thought has been given to adapting his manuscript to a western audience or to the basic editorial values of clarity and concision; and it screams out for native-English-speaker copy editing. It is a difficult read and, sadly, the Czechish is least comprehensible in its unique contribution: the interviews. The book makes little reference to the established western literature on central planning but is deeply indebted to Czech-language secondary sources with which most western readers (including myself) will be unfamiliar.

The first chapter is written by Lucie Coufalová and presents the context in which the planning system operated, the formal and informal institutions of the socialist system. There is a Czech contradiction in its framing: it adopts the now-orthodox theoretical perspective of totalitarianism, yet it is at its best presenting specificities and complexities which do not easily fit this theory: the multi-party political structure, the loyalty oaths that teachers had to swear, the elements of the Criminal Code most commonly used to prosecute dissidents, the rules for foreign travel, high levels of divorce and abortion, the relative insignificance of religion, the standard tropes of ‘those who do not steal from the state, steal from their families,’ and endemic, minor corruption.

The remainder of the book covers reasonable topics: the theoretical background of Marxism-Leninism, the formal structures of planning, the practice of planning, macroeconomic results, followed by a conclusion. But there is much repetition and circularity. Themes are constantly reprised for no clear reason. The chapter on theory reveals nothing new, but surprisingly there was almost nothing on the labour theory of value, which Hungarian economists certainly took seriously, even if pricing there, as in Czechoslovakia, was ultimately based on trial and error. The chapter on formal planning structures contains some interesting information about the specifics of the Czechoslovak model and the role of the ‘production economic units’ (VHJ). There is much that is new for the cognoscenti, but the significance of the detail is not made clear. Czech and Slovak readers will learn in much detail how their socialist economy functioned, but Anglo-Saxon readers will struggle to distinguish the general from the particular.

The fourth chapter, on the system in practice, is where the interviews come into their own, but the reader is distracted by sections recapitulating issues, such as ownership and nationalisation, which have been considered previously. There then follows a discussion of planned versus market in which Židek seems to accept that a market of a kind existed because negotiations took place at all levels in the planning hierarchy. Eventually, the standard features of centrally planned economies emerge: shortages and stockpiling of goods and workers generally and hiding reserves from planners in particular; pursuit of enterprise or, more accurately, managerial, rather than national interests; soft budget constraints; the influence of the party at both local and national levels; all-pervasive ignorance within an imaginary omniscient planning hierarchy, which could be mitigated to an extent if you had the right contacts. In the (slightly Czechish) words of one interviewee, ‘the whole system had only one goal and it was to win the bonus, not to meet the plan. It was just a technical means and it was manipulated with and cheated and revised, simply so that the bonus conditions were met.’ (p. 146) The discussion, in boxed text 4.3, of the role of the secret service is interesting and not usually included in studies of central planning. Box 4.5 gives a summary of methods of manipulating plans: when numbers did not fit, plans were adjusted. The text is unusual too in covering the ‘non-plan’: areas where economic activity took place entirely beyond the scope of the plan, the classic example being the Slušovice agricultural cooperative.

Chapter five addresses the macroeconomic results of central planning beginning with a graph showing declining rates of growth in GDP and net material product. A table showing how the plan for Škoda was revised constantly between 1976 and 1980 so that it gelled with actual production seems more relevant to the preceding chapter. There is discussion of half-hearted plans for economic reform, the extent of the informal economy (including that developed by Vietnamese guest-workers), and classic problems of socialist economies: failing to move from extensive to intensive growth or away from high energy consumption, reliance on undemanding Comecon markets, investment cycles, the bias towards heavy industry, outdated technology, the constant labour shortage, prices, and the problems of multiple exchange rates. There are interesting boxed texts on the Baťa shoe company, ‘Action Z’ (‘voluntary actions’ to make up for shortcomings of the plan), industrial espionage, Škoda cars, and, again, the Slušovice agricultural cooperative. The conclusion recapitulates the key findings in a characteristically Czech way: as a dialogue with an imaginary defender of central planning.

 

Nigel Swain is Honorary Senior Research Fellow in the Department of History, University of Liverpool. He has published extensively on the economic, social, and political history of socialist Eastern Europe.

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Subject(s):Economic Planning and Policy
Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):20th Century: WWII and post-WWII