Labour Incentives in Soviet Kolkhozy
This paper has a cause: the appearance in the Journal of Comparative Economics (June 1980, vol. 4, no. 2) of an article by D. Israelsen, in which it was argued, inter alia, that labour incentives are more effective in a kolkhoz than in a capitalist enterprise; the latter pays its employees the equivalent of their marginal product, whereas in a kolkhoz the pay of members equals the hours they work divided into the net product, and extra effort would earn somewhere between average and marginal product, which, on conventional assumptions, must be more than the marginal product. Since any kolkhoz member can increase his share by working more, this would particularly benefit him/her in a large kolkhoz. The specific conclusion is then drawn that those who argue that kolkhoz labour incentives are in principle ineffective, and ‘that the large size of collectives exacerbates the problem’ are in error. Somewhat similar conclusions were reached by John P. Bonin.1 Were this so, both Soviet and Chinese reformers would be in error too.
KeywordsMarginal Product Collective Work Additional Labour Capitalist Firm Private Produce
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