ABSTRACT
Bornstein (1977, pp. 103–4) lists the main features of the traditional command economy as follows: the overwhelming dominance of nationalised means of production in non-agricultural sectors; agriculture dominated by collectives only nominally independent; a hierarchical economic organisation, with decision-making power resting mainly at the top, although vertical bargaining takes place; output and its distribution planned in detail in both physical and value terms; administrative allocation of non-labour inputs, with labour controlled via wage funds; prices mainly centrally determined and infrequently changed; money essentially passive, financial flows being adjusted to physical flows; managerial and worker incentives mainly emphasise quantitative targets; arbitrarily determined exchange rates and a system of taxes and subsidies that separate domestic from foreign prices. Specialised foreign trade enterprises means that production units have no direct contacts with foreign partners.
