Administrative-command system


The administrative-command system Административно-командная система, АКС, also command-administrative system is the system of management of an economy of a state characterized by the rigid centralization of economic planning and distribution of goods, based on the state ownership of the means of production and carried out by the governmental and Communist Party bureaucracies in absence of economic freedom.
The term is used to describe the economy of the Soviet Union and the economies of Soviet Bloc, which closely followed the Soviet model. Paul Roderick Gregory in his 2004 book The Political Economy of Stalinism: Evidence from the Soviet Secret Archives argues that the collapse of the Soviet Union was due to the inherent drawbacks of the ACS: poor planning, low expertise of planners, unreliable supply lines, conflict between planners and producers, and the dictatorial chain of command. Once the enterprizes gained some freedom during perestroika, the rigid system of ACS imploded.

History of the term

Already in 1985 John Howard in his article "The Soviet Union has an administered, not a planned, economy" argued that the common description of the Soviet-type economic planning as planned economy is misleading: while central planning did play an important role, the Soviet economy is de facto characterized by the priority of highly centralized management over planning. Therefore he writes the correct term would be "centrally managed" rather than "centrally planned" economy.
The term "administrative system" was introduced by Russian economist Gavriil Kharitonovich Popov during the perestroika period in the Soviet Union as the title of a section in his 1987 article "From the Point of View of an Economist", which analyzed the novel of Alexander Bek, banned in the Soviet Union. It was published in Russian in 1986, with the beginning of perestroika, and was widely discussed in the society. The term was picked up by Mikhail Gorbachev, who used the expression "administrative-command system" in his November 2, 1987 speech. The concept was further expounded in Popov's 1990 collection of his essays Блеск и нищета административной системы .