Schools of economic thought

The mathematical economists were always a small minority among Soviet economists. What made them special was the fact that they had a consistent, even if partial and seriously flawed, theory of the socialist economy. This can not be said of their colleagues in political economy and applied economics. By the early eighties, however, it was generally recognised that the optimal planning approach was in crisis. The reformist aspirations of the Sofeists had been frustrated. The use of mathematical methods in planning and management had proved to be a typical Soviet campaign with many words and much expense but with few practical results other than limited mechanising of planning calculations. Instead of being a part of an economic modernisation programme, mathematical planning methods helped to shore up the existing economic system by curbing the information overload which otherwise would have overburdened planners. Viewed from this perspective, computerising the economy actually proved harmful.

Optimal planning had thus become one of the victims of the conservatism of the Brezhnev era. Not all the fault could be laid at the door of politics. The fundamental optimal planning approach itself badly needed a reconsideration. It had remained an abstract theoretical construction. No empirical breakthroughs had been achieved in such crucial matters as the determination of the optimality criterion for national economic planning. A few economists continued to argue for centralised planning through computers and shadow prices, but nobody was able to show how that could be done in practice. Scientific centralism remained a fantasy – a dream for some, a nightmare for others.