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why did communist countries like USSR or China retain money, although they abolished markets ?

2007-02-26 03:06:39 · 3 answers · asked by gelal2003 2 in Social Science Economics

3 answers

They needed money as a way of allocating food and other consumer goods to the people.

I mean they could have ration cards for X amount of bread products and Y amount of meat products per month. But giving cash to people is easier and prevents a "black market" exchange of bread coupons for meat ones.

Business-to-business transactions only used money for accounting purposes, as they were approved by central government.

2007-02-26 07:50:40 · answer #1 · answered by Anonymous · 0 1

Every communist knows that communism can't work because it stifles individual creation of wealth. Because of this, the governments tend to hoard money against the time when the "production" of the people (impersonal resources to communism) drops to a point where the GOVERNMENT can no longer be supported. Witness the government of the USSR that was "defeated" primarily because it was (A) Corrupt and (B) it went bankrupt.

China knows this as well and are trying to encourage free market areas that produce the majority of the governmental wealth. However, the VAST majority of China is still very very poor and for them, communism isn't "working" either.

All communist know that in order to function, they actually depend upon the activities of the free market to survive. They try to control that market as much as possible, without stifling its production.

This is occurring in America at an alarming rate, where socialist/communist desperately need the free market here, yet chip away at the freedoms that the free market depend upon. The goal is to somehow reach a "balance" where a few producers create enough wealth that the government can sieze and redistribute to the "masses".

2007-02-26 04:08:58 · answer #2 · answered by Anonymous · 0 0

Because they weren't really communist. There has never, ever, in the history of all society, been a communist country.

2007-02-26 03:14:00 · answer #3 · answered by trer 3 · 0 2

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