Transformations  in
Business & Economics

THE POLITICAL ECONOMY OF ROMANIAN SOCIALISM: A CASE STUDY IN PLANNED CHAOS
Mihai Vladimir Topan, Cristian Valeriu Paun, Andreas Stamate-Stefan, Matei-Alexandru Apavaloaei

ABSTRACT. There are no adequate economic surveys of the Romanian socialist period (roughly 1947/1948 - 1989, although much of the decade of the 1990s could be included as some sort of post-socialism, or reluctant transition). Ironically, among the most lucid exposition of the main thrust of socialist economic policies can be found not in economic studies, but in the general history of the Romanians, written by Vlad Georgescu (Georgescu, 1991[1984]). The main element which usual discussions of the period miss is the idea that under the apparent orderly planned economy, there laid in fact a planned chaos, a waste of resources on a colossal scale (Mises, 1981[1922]). Essential for understanding this aspect is the argument of the impossibility of economic calculation under state ownership of the means of production (Mises, 1990[1920]). After reiterating Mises's argument, we will use it to criticize some recent re-evaluations of Romania's socialist experience. Then, we will provide three case studies to illustrate how the allocative chaos manifests itself in practice .

KEYWORDS:  socialism, calculational chaos, oil industry, privatization, corruption.

JEL classification:  B53, F02, P1, P2.