Michal Kalecki's contributions to the theory and practice of socialist planning

Abstract

Five main contributions by Kalecki to the theory and practice of socialist planning are singled out and discussed: i) a comprehensive and coherent model of the organisation of the socialist economy, an alternative to the Soviet-type model or Lange-type market socialism; this is characterised by mark-up pricing related to investment finance, quantity adjustments, net value performance indicators for firms subject to employment targets and vertically grouped and, above all, workers' control; ii) emphasis on external and political limits to planners' accumulation policy, set respectively by natural growth (golden rule accumulation policy being regarded as maximum) and by political concern for short term consumption; iii) rationalisation of Soviet-type practice in the selection of investment projects, with multiple but fairly close shadow interest rates governing technical choice (not the level and structure of investment expansion); iv) an ingenious and partly successful attempt at providing a guideline for optirnising consumption structure; v) a practical procedure for drawing perspective plans for investment and the long-run development of the socialist economy. These contributions are shown to be related to Polish conditions in the 1960s and to require a number of qualifications which reduce their generality without reducing their relevance either there and then or elsewhere today.