Friday, May 01, 2015

Planned economy vs. Market economy--which way should the light switches go?

Sule Pagoda Roundabout--photo from Internet

Planned economy vs. market economy--which way should the light switches go?

Excerpt from my Introduction to the Institute of Economics, Rangoon, alt. memorial edition--in the works, will be ready soon--

Maung Su San (Yebaw Chan Aye), the well-known Soviet Union returnee, was at my MA oral exam.  He was a government-appointed ex-officio Board Member of the Institute.  He did not attack me, and seemed to get on well with the others, especially Saya Findlay and Saya Aye Hlaing.
My MA thesis, supervised by Dr. Ronald Findlay, was about how Polish economists used a back-handed formula to calculate an interest rate on capital, which nominally the Polish planned economy at that time did not have.  Dr. Findlay was instrumental in pointing out that this in fact constituted a shadow interest rate, as in reality capital can never be assumed to be price-free or cost-free.
I remember Maung Su San joking that as “the Soviets do everything upside down” the light switches will go in the reverse direction.
I remember when I finally got to Poland in 1968-69 for a Diploma in Economic Planning, I wondered about the lights switches, even as I saw “something from Dr. Findlay’s lectures”  on the sizing of winter coats in Poland (Soviet-type economies), as there was only one large coat in the department store window (the success indicators must have been value-related).  My Polish friend had to take me across the River Vistula in Warsaw to the black market, to get me a suitable-sized coat.  In 1982, I brought it to the USA, and discarded it later in the dorm trash room.
I still wondered about the light switches and which way was the "correct position."

Copyright KMKaung

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