it's interesting to me, how did the communist government use to determine the demand for products? e.g., guitars. people didn't have money to buy anything, so consumer behaviour data was really small, and irrelevant/useless too, since consumerism was discouraged.
For major products like cars, you would have to go down on a list. It took *years* to get your hands on something like that. Smaller luxury items like blue jeans or guitars were handled by the black market. You needed connections and bribery to get something special. If demand outstripped supply, as it often did - tough luck. Basically, the system was the opposite of our reactionary economy. They had panels to determine what products would be needed (basic school supplies, food.) But their predictions sucked so much that there were constant shortages and excesses. Another thing is that the supply line was set up into three channels. The best stuff always went to the military, the second best to export, and the leftovers to the people. Theres an interesting book about this guy who moves to the soviet union with his family and describes the entire process in detail. Cool stuff. So back to the question. The soviets had an economy based on the black market and bribery. The government knew it, and the only reason it survived was to let the people think they were getting away with something (that way they wouldn't revolt.)
A nation survives on it's economy. That's why communism falied and capitalism works. Another thing that cripples, and even kills, an economy is the third-party payer.
Communism and huge corporations share the trait of central planning done by leaders who overestimate the value of their own intelligence while being surrounded by yes men who make the problem worse by not bearing bad news. At least the corporations have to file earnings reports. Fierce Competition without externalization of costs, is the basis of a strong economy. Central planning fails because nobody is as smart as trial and error. Sexual Selection in nature creates diversity and competition because nature knows the wisdom of trial and error. Feudalism was worse than Communism. "Crony Capitalism" is the modern version of Feudalism and is worse than Communism. Communism uses wrong methods to try to make the economy work. Crony Capitalism does not care if the economy works as long as the share of the economy controlled by the "Crony Capitalists" increases. Crony Capitalism excels at externalizing costs. You could call Crony Capitalism "legal or at least unpunishable organized crime". Crony Capitalism is my explantion for why the standard of living in Russia has yet to surpass the standard of living in Soviet Russia.
How does capitalism determine the price of products. They determine what people could be willing to pay for something. How does capitalism determine the need for a product? They will create a market if there isn't any by advertisement/propaganda.
took six years to get a new car abck in the '90s, but think about how long you wolud save to get one as a capitalist, a good secondhand car takes about 5 years to save for in my income bracket so i say go the soviets how about telling the thousands of people forced into the ghetto by your government that capitalism is a success
How does advertising "invent" demand? Advertising targets the quantity demanded of a specific product amongst its competitors. Demand itself is determined by many different factors, such as technology, consumer income, availability of compliments versus substitutes, and the hierarchy of needs. For example, a Honda commercial won't convince you to buy a new car. It will convince those in the market for a new car to buy a Honda. Sorry to go off topic.
I wonder how Kazakhs are doing in Kazakhstan. The country is a heaven for oil and gas. They hate African Americans (my AA friends tell me). I am not sure if the entire Russian groups of countries are like that i.e. racist!
