Abstract
Does transition of a labor-managed economy to a capitalist economy really lead to an efficient economy? Which transformation strategies can be established during the transition? Which type of capitalist economy can be predicted by such transition strategies? This paper answers these questions by using the economic models described and explained by the main principles of post-Keynesian economic theory. It is found that the transition process leads to replacing the investment function, instituting the labor market, and replacing the expectations of a personal income rate with a profit rate. To achieve these processes, privatization and institution building, or institutional restructuring, are crucial. They also remove problems that should be removed by stabilization and restructuring.
Similar content being viewed by others
References
Appelbaum, E. “The Labor Market,” in A. S. Eichner, ed.,A Guide to Post-Keynesian Economics, London, United Kingdom: MacMillan Press, 1979, pp. 100–19.
Balcerowicz, Leszek. “Fallacies and Other Lessons,”Economic Policy, December 1994, pp. 18–50.
Bober, Stanley.Recent Developments in Non-Neoclassical Economics, Aldershot, United Kingdom: Ashgate, 1997.
Chowdbury, A.; Islam, I.The Newly Industrializing Economies of East Asia, London, United Kingdom: Routledge, 1993.
Dallago, Bruno; Mittone, Luigi. “The State and the Firm: Centralization and Decentralization of Economic Institutions: An Introduction,” in Bruno Dallago; Luigi Mittone, eds.,Economic Institutions, Markets and Competition, Cheltenham, United Kingdom: Edward Elgar, 1996, pp. 1–32.
Domar, E. D. “The Soviet Collective Farm as a Producer Cooperative,”American Economic Review, March 1966, pp. 734–57.
Eatwell, John; Ellman, Michael; Karlsson, Mats; Nuti, D. Mario; Shapiro, Judith.Transformation and Integration. Shaping the Future of Central and Eastern Europe, London, United Kingdom: Institute for Public Policy Research, 1995.
Furobotn, E. G. “The Long-Run Analysis of the Labour-Managed Firm: An Alternative Interpretation,”American Economic Review, March 1976, pp. 104–23.
Harris, D. J.Capital Accumulation and Income Distribution, Palo Alto, CA: Stanford University Press, 1978.
Hoen, Herman W.The Transformation of Economic Systems in Central Europe, Cheltenham, United Kingdom: Edward Elgar, 1998.
Hodgson, Geoffrey M. “Varieties of Capitalism and Varieties of Economic Theory,” in Klaus Nielsen; Björn Jonson, eds.,Institutions and Economic Change, Cheltenham, United Kingdom: Edward Elgar, 1998, pp. 215–42.
Jarsulic, M.Effective Demand and Income Distribution. Issues in Alternative Economic Theory, Cambridge, United Kingdom: Polity Press, 1988.
Korać, M. “Teze za teoriju socijalističke robne proizvodnje,”Naša stvarnost, 12, 1961, pp. 31–53.
Kregel, Jan A. “Financial Markets and Economic Development: Myth and Institutional Reality,” in Klaus Nielsen; Björn Jonson, eds.Institutions and Economic Change, Cheltenham, United Kingdom: Edward Elgar, 1998, pp. 243–57.
Lavrač, I. “Cena uporabne vrednosti družbenega kapitala,”Teorija in praksa, 8–9, 1968, pp. 1126–43.
Levine, D. P.Economic Studies: Contribution to the Critique of Economic Theory, London, United Kingdom: Routledge and Keagan Paul, 1977.
Mead, J. E. “The Theory of Labour-Managed Firms and of Profit Sharing,”Economic Journal, March 1972, pp. 402–28.
Pasinetti, L. L. “Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth,”Review of Economic Studies, 1962, pp. 267–79.
Pasinetti, L. L.Growth and Income Distribution. Essays in Economic Theory, Cambridge, United Kingdom: Cambridge University Press, 1974.
Pejovich, Svetozar. “The Market For Institutions versus the Strong Hand of the State: The Case of Eastern Europe,” in Klaus Nielsen; Björn Jonson, eds.,Institutions and Economic Change, Cheltenham, United Kingdom: Edward Elgar, 1996, pp. 111–25.
Pjanić, Z.Robna privreda u samoupravnom sistemu, Belgrade, Yugoslavia: Institut Drustvenih Nauka, 1974.
Robinson, J.Essays in the Theory of Economic Growth, New York, NY: St Martin's Press, 1962.
Robinson, J.; Eatwell, J.An Introduction to Modern Economics, London, United Kingdom: McGraw-Hill, 1973.
Rodrigo, G. Cris. “Long-Term Perspectives on Economic Reform and Industrial Restructuring,” in Philippe R. Scholtes, ed.,Industrial Economics for Countries in Transition, Cheltenham, United Kingdom: Edward Elgar, 1996, pp. 3–38.
Samuelson, P. A. “Parable and Realism in Capital Theory: The Surrogate Production Function,”Review of Economic Studies, 3, 1962, pp. 193–206.
Samuelson, P. A.; Modigliani, F. “The Pasinetti Paradox in Neoclassical and More General Models,”Review of Economic Studies, 4, 1966, pp. 269–302.
Tajnikar, M. “Reconstruction of the Theory of Distribution in the Labour-Managed Economy Following the Example of Post-Keynesian Economic Theory,”Economic Analysis and Worker's Management, 1, 1986, pp. 45–63.
Todorović, M. “O nekim pitanjima našeg privrednog sistema,”Socializam, 6, 1962, pp. 3–69.
Toms, M. “Towards a Marxian Model of Capital Accumulation, Unemployment and Distribution with One Technique of Production,”Czechoslovak Economic Papers, 1976, pp. 3–70.
Vanek, J.The General Theory of Labor-Managed Market Economy, Ithaca, NY: Cornell University Press, 1970.
Wagener, Hans-Jürgen. “What Type of Capitalism is Produced by Privatization?,” in Bruno Dallago; Luigi Mittone, eds.,Economic Institutions, Markets and Competition, Cheltenham, United Kingdom: Edward Elgar, 1996, pp. 90–110.
Ward, B. “The Firm in Illyria: Market Syndicalism,”American Economic Review, September 1958, pp. 566–89.
Whitley, R. “Dominant Forms of Economic Organization in Market Economies,”Organization Studies, 15, 2, 1994, pp. 153–82.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Tajnikar, M. From a labor-managed economy to a market economy: A contribution to economic transformation. Atlantic Economic Journal 28, 93–103 (2000). https://doi.org/10.1007/BF02300534
Issue Date:
DOI: https://doi.org/10.1007/BF02300534