The philosophy underlying Socialist prices and the institutional set-up for price fixing that prevailed before the reforms were not conducive to intensive growth. On strictly ideological grounds, it was believed that prices should be based on the Mandan concept of value, i.e. the cost of live and materialized labour plus a macro-social mark-up proportional to prime costs. Thus rent, interest (to some extent), utility and scarcity, as well as fluctuations in supply and demand, were not considered as contributions to value. Similarly, marginalism (marginal utility, marginal cost pricing, marginal revenue) was rejected as being subjective and consequently anti-Mandan.
KeywordsForeign Trade Price System German Democratic Republic Socialist Country World Market Price
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