Enterprise Performance

Abstract

As is generally well known, orthodox Marxian economics is preoccupied with macrosocial issues to the neglect of microeconomics. Many microeconomic concepts are in conflict with the labour theory of value, social justice and planned economic development. After the formation of Socialist States, the first reaction was to restrict the independence of enterprises and this was conditioned by two considerations. On the one hand, it was aimed at preventing the recurrence of some of the abuses typical of laissez-faire capitalism, such as the absolute power of the management over workers, the exploitation of the public, disruptive competition and anti-social production. On the other, owing to the shortages of competent managerial personnel, it was found desirable, and indeed necessary, that central authorities make all the crucial decisions for individual enterprises. This role of enterprises, as passive and obedient executors of commands from above, fitted quite well into the centralized directive planning and management under which efficiency was of little concern.