Economic Ideas and Institutional Change: Evidence from Soviet Economic Discourse 1987-1991

In recent years, institutional and evolutionary economists have become increasingly aware that ideas play an important role in economic development. In the current literature, the problem is usually elaborated upon in purely theoretical terms. In the present paper it is argued that ideas are always also shaped by historical and cultural factors. Due to this historical and cultural specificity theoretical research must be supplemented by historical case studies. The paper analyses the shift in ideas that took place in Soviet economic thought between 1987 and 1991. This case study, it is argued, may contribute to our understanding of the links between ideas and institutions. More specifically, it sheds new light on the issue of whether the evolution of economic ideas is pathdependent, so that they change only incrementally, or whether their development takes place in a discontinuous way that can best be compared with revolutions

Prices and Cost Accounting

Prices are a central issue in the transition to economic independence, cost-accounting relations, and self-financing. The provision: "The state uses ⦠prices for the all-around development of economic competition between enterprises" (Article 2, sub-paragraph 4 [of the draft Law on the Socialist Enterprise]) is unquestionably correct. However, does this mean that prices are established administratively, that the State Committee for Prices designates and assigns prices to enterprises, as has been the case up to now, or that the enterprise itself establishes its own prices in accordance with its production costs? If the enterprise is given the right to "establish" prices on its products, how can the state use them "for the all-around development of economic competition"? And another problem arises here: Can the enterprise establish prices, or is this the prerogative of the market, where the interaction of demand and supplyvolatile, ever changing, and impossible to calculate even by the most sophisticated computerdetermines the equilibrium price that simultaneously incorporates the absence of shortages and gluts.