Quote image editor
“The mistake the Bolsheviks made was not in aiming at the modernisation of Russia. That was entirely sensible. Nor was it a mistake to ascribe a major role in the economy to the state. This is quite normal in the modern world. Their mistake was to suppose that successful modernisation required the elimination of the market and of private enterprise. They did not realise the role that the market and private enterprise can play in generating and maintaining self-sustaining economic growth. Looking at all economic activity as if it were a zero-sum game was very one-sided. Furthermore, the Bolsheviks failed to realise that for the state to attempt to micromanage every farm, factory and office is a very inefficient form of management, that wastes information and potential local initiatives and entrepreneurship. Furthermore, coercion tends, in general, to be less effective than market incentives in raising labour productivity, and to be indifferent to human suffering and loss of life (see Chapters 6 and 7).” — Michael Ellman