Absolute and Exchangeable Value
The idea that changes in the relative or exchangeable value of a pair of commodities might usefully be attributed to alterations in the ‘absolute value’ of one or the other of them will appear rather odd to anyone accustomed to thinking of the basic probl
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command economy A command economy is one in which the coordination of economic activity, essential to the viability and functioning of a complex social economy, is undertaken through administrative means - commands, directives, targets and regulations- rather than by a market mechanism. A complex social economy is one involving multiple significant interdependencies among economic agents, including significant division of labour and exchange among production units, rendering the viability of any unit dependent on proper coordination with, and functioning of, many others. Economic agents in a command economy, and in particular production organizations, operate primarily by virtue of specific directives from higher authority in an administrative/political hierarchy, that is, under the 'command principle'. Thus the life cycle and activity of enterprises and firms, their production of output and employment of resources, adjustment to disturbances, and the coordination between them are primarily governed by decisions taken by superior organs responsible for managing those units' roles in the economic system. One of the most distinctive features of such an economy is the setting of the firm's production targets by higher directive, often in fine detail. The administrative means used include planning, material balances, quotas, rationing, technical coefficients, budgetary controls and limits, price and wage controls, and other techniques aimed at limiting the discretion of subordinate operational units/firms. The command principle strives to fully and effectively replace the operation of market forces in the key industrial and developmental sectors of the economy, and render the remaining (peripheral) markets manipulable and subordinate to political direction. Thus the command principle is likely to clash with the operation of market forces, yet a command economy may nonetheless contain and rely on the market mechanism in some of its sectors and areas, for example, influencing labour allocation, or stimulating small-scale private production of some consumables. The term 'command economy' comes from the German Befehlswirtschaft, and was originally applied to the Nazi economy, which shared many formal similarities with that of the Soviet Union. It has received its fullest development in the analysis of the economic system of the Soviet Union, particularly under Stalin, although it has been applied to wartime administration of the US economy (1942-6; see Higgs, 1992), the Mormon economic system in mid-19th century Utah (Grossman, 2000), and the Inca production system in the 16th century Andes (La Lone and La Lone, 1987). Synonymous or near-synonymous terms include 'centrally planned economy', 'centrally administered economy',
'administrative command economy', 'Soviet-type economy', 'bureaucratic economy' and 'Stalinist economy'. The command economy's conceptual origins go back to the Viennese economist Otto Neurath, who in the years before and after the First World War developed an extreme version (to the po
