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The Grand Experiment of Communism: Discovering the Trade-off between Equality and Efficiency (Previously titled: Cultural Transmission and the Pendulum of Economic Systems: The Case of Communism)
- Publication Year :
- 2011
-
Abstract
- This paper aims to explain the rise and fall of communism by exploring the interplay between economic incentives and social preferences transmitted by ideology. We introduce inequality-averse and inefficiency-averse agents and analyze their conflict through the interaction between leaders with economic power and followers with ideological determination. The socioeconomic dynamics of our model generate a pendulum-like switch from markets to a centrally-planned economy abolishing private ownership, and back to restoring market incentives. The grand experiment of communism is thus characterized to have led to the discovery of a trade-o¤ between equality and efficiency at the scale of alternative economic systems. While our focus is on the long-run transitions from capitalism to communism and back observed in the course of the 20-th century, the model also derives conditions under which each of the systems can remain stable.<br />Current version uploaded April 2013.
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.doi...........bd2ad1a4bfd110015e79dbd8a243da94
- Full Text :
- https://doi.org/10.22004/ag.econ.116909