The economic policy goal of capitalist market economies is mainly growth, price stabilization and distribution under the hypothesis that the market function distributes resources to each sector of the economy.
The main purpose of Soviet economy polic...
The economic policy goal of capitalist market economies is mainly growth, price stabilization and distribution under the hypothesis that the market function distributes resources to each sector of the economy.
The main purpose of Soviet economy policy is to catch up to the advanced western economics. The reason is to insure that the military powers are sufficient to protect soviet socialism from foreign invasion.
Therefore, the Soviet economy concentrates its resources into buildiny up heavy industries by means of a planned command economy.
It must therefore have a bureacratic hierachy as it is goverment, rather than the market, that must distribut the resoures according to this plan.
Also, the planned economy can not permit price and market mechanism to operate as in market economies since the government has to control the flow of goods and services into heavy industries.
Foreign trade is also managed exclusively by government monopoly in order to arrange completly the balance between forign trade and internal economic policy.
Therefor, Soviet foreign trade policy can not permit convertibility of Soviet currency and commodities into foreign exchange, and so the exchange rate does not have any meanning in the sense that the fluctuation of the exchang rate can not influence the trade flow.
In pursuing this policy of catching up to the advanced western economies, the soviet have been consistentley managing every aspect of their economy since the Bolshvik revolution, from without considering the use of price or market mechanism.