Post #110

⭐Why did market socialism collapse? Market socialism tried to combine the incompatible: Public ownership and the market, but it ended up inheriting the worst from both. 📝The main reasons for its failure were: • Soft budget constraints: Unprofitable factories knew that the government would save them anyway. Why optimize? • Guaranteed employment: Workers were not fired, and their salaries were not reduced even when their income fell. Social peace was maintained, but the economy deteriorated. • Inflation and debt: loans were given generously, prices rose, and shortages became chronic. • Political fragility: reforms were a compromise rather than a strategy. In Yugoslavia, this accelerated the country's disintegration. ⁉️The outcome Market socialism proved to be a half-measure: not a market because there was no competition or bankruptcy, and not socialism because prices and loans went wild. China and Vietnam made a different choice: they allowed private ownership and foreign capital and focused on market reforms. Formally, it is "socialism"; in fact, it is state capitalism. 📱Telegram I 📱LinkedIn