Rediscovering Fire: Basic Economic Lessons from the Soviet Experiment [Perfect Paperback]

Guinevere Liberty Nell (Author)

Book Description

ISBN-10: 0875867472 | ISBN-13: 978-0875867472 | Publication Date: February 2, 2010

Marx promoted the idea that economic laws were contingent upon property relations, and the Soviet Union tested his theory on a grand scale. In managing an economy based on public ownership, they discovered that they could not repeal economic laws. By struggling with the consequences of their policies, the Soviets unintentionally relearned the basics of economics from scratch essentially, rediscovering fire. In this book, Guinevere Liberty Nell visits this historical laboratory of social science to study the lessons in basic economics that it teaches.

Nell observes that the founders of the Soviet experiment, Lenin and other Bolshevik leaders, wrote volumes of articles and books on Marxist theory and then proceeded to enact the very policies that they promised. Therefore the Soviet experiment provides an ideal lens through which to view the consequences of policy based upon these theories. However, despite the wealth of information available on the Soviet experiment, few writers have closely analyzed this historical process and what lessons it might offer for market economies.

In this book, Nell carefully considers Soviet theory and practice, and draws out the lessons that Soviet planners learned. Each chapter considers one theory; the experience in the Soviet Union of policies based on this theory, and the reforms that planners implemented when the policies failed to produce the intended results.

Nell's lessons capture the dynamic nature of the economy and illustrate insights from the debate between socialists and Austrian economists. They should be useful and informative not only for readers interested in basic economics, but also for economists interested in heterodox approaches to economic modeling and theory, as well as for the citizen interested in rethinking the assumptions underlying mainstream policy debates.

Editorial Reviews

Review

I am really impressed by the book: the careful collection of excellent quotations, a well-balanced approach (quite rare!) and transparent organization of ideas. --Janos Kornai, Prof. of Economics Emeritus, Harvard University

[The] idea is very important - and ambitious. ... I was impressed by the depth of [Nell's] knowledge and understanding of the Soviet economy and its history --Mark Harrison, author of Soviet Planning in Peace and War 1938-1945

Nell (The Heritage Foundation) extracts ten economic lessons that can be taken from the experience of the Soviet Union, a "near-perfect laboratory testing of socialist theory and of the economic laws of the market." For each of these lessons she discusses the economic theory offered by socialists; the Soviet implementation of the socialist theory and the outcomes and lessons that Soviet policymakers learned; and the lessons that should be applied to analyzing current policy questions. These lessons involve the real benefits of competition; the dynamics of unemployment and efficiency; the value of profit and loss for the firm; the value of profit and loss for the economy; middlemen, trade, and the market system; the high price of price control; money and the danger of centralized monetary policy; regulation and the institutions of a dynamic economy; democracy and freedom; and the distinction between markets and corporate power. --©2010 Book News Inc. Portland, OR

"I am really impressed by the book: the careful collection of excellent quotations, a well-balanced approach (quite rare!) and transparent organization of ideas." --Janos Kornai, Prof. of Economics Emeritus, Harvard University

Rediscovering Fire is an ambitious and thought-provoking book. Guinevere Nell demonstrates impressive understanding of the Soviet Union s economic system, and extracts fascinating insights from the experience and lessons of socialism. There are critical implications for the character of economics taught in universities. Students and others interested in alternative approaches to economic theory and policy will learn much from Rediscovering Fire. --Review by Mark Harrison, professor of economics and the author of Guns and Rubles: the Defense Industry in the Stalinist State, among other books on the Soviet Union

About the Author

Guinevere Liberty Nell works on economic modeling and policy analysis in the Center for Data Analysis of The Heritage Foundation. Nell's research focus includes Austrian economics and Soviet economic history, as well as dynamic economic modeling and policy analysis. Nell has researched these areas independently in addition to her formal study and her work for The Heritage Foundation. Nell's independent work also includes an agent-based economic model, which now forms the basis of a new entrepreneurship model being constructed in the Center for Data Analysis. Nell has published in peer-reviewed journals on Austrian economics and Soviet economic history.

Product Details

• Perfect Paperback: 336 pages
• Publisher: Algora Publishing (February 2, 2010)
• Language: English
• ISBN-10: 0875867472
• ISBN-13: 978-0875867472
• Product Dimensions: 9 x 5.9 x 1 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #2,098,271 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

2 of 3 people found the following review helpful:

5.0 out of 5 stars highly recommended soviet history, July 27, 2010

By 

Cameron M. Weber "Cameron W" (Brooklyn, NY) - See all my reviews
(REAL NAME)   

This review is from: Rediscovering Fire: Basic Economic Lessons from the Soviet Experiment (Hardcover)

I like this book alot for many reasons (and not only because I was lucky enough to be able to review a couple of chapters of the book while Ms. Nell was still working on it over the last year or so). Rediscovering Fire is a wonderful read with a very witty and engaging literary style, while at the same time showing the author has a deep understanding of the Soviet Experiment and its leading intellectual lights, political figures, and specifics on the `experiment' itself as it played out in its different guises over the USSR's 70 year-plus lifespan.

In summary the book has a main thesis, that being that the law of supply and demand cannot by overturned despite the iron will of central planners. The economic experience of the Soviet Union does indeed provide a good "historical laboratory" (Nell's words) from which the lessons of history can be wisely gained and fruitfully applied to current (and timeless) debates over economic policy.

Chapters cover the economic basics ( competition, economic dynamics, the primacy of profit and loss in resource production and distribution, the role of the entrepreneur, price controls, centralized monetary policy, regulation, democracy and freedom, corporatism) and these topics themselves make the book an excellent summary of economic fundamentals. The chapters for each of these topics follow the same outline - a solid methodological and literary approach - an introduction to the topic, the socialist argument for intervention, the soviet experience (and failures) with this interventionism and the lessons learned from these failures for current economic debate, all followed by copious chapter endnotes, themselves showing the work of a writer dedicated to her topic. Each chapter is fully-contained, and therefore the reader can chose what interests them the most and begin there if they wish. (I recommend the chapter on monetary policy).

Contemporary Soviet economic-theoretical works are generously excerpted along with commonsensical yet insightful analyses of these often utopian writings. Nell does not dismiss these writers in an off-hand manner but engages with them fully and respectfully, showing again a full understanding of the `experiment' itself and its intellectual (Marxist-Leninist, and later Stalinist and post-Stalin) under-pinnings.

The book is easy reading for those new to economics yet contains enough scholarly insight and critique (drawing from writers as diverse as Alchian, Boettke, Bukharin, Ebeling, Engels, Garrett, von Hayek, Horwitz, Kantorovich, Keynes, Kirzner, Kornai, Lange, Lenin, Marx, J.S. Mill, von Mises, Adam Smith, Trotsky, Tugwell and Wootton) to fully capture the imagination of economists, economic historians and historians of economic thought, not least those unfamiliar in full detail of Soviet history.

Leaving economic fundamentals aside (and I agree with and fully enjoy Nell's historical lessons and insights for today, other, less free-market, economists may not enjoy the historical lessons as much as I do, though will very much enjoy Nell's expositions on Soviet-Marxist economics), for this reader who worked in the foreign aid industry in the ex-USSR, the Soviet history alone makes the book a welcome addition to the literature and a must-read.

I wish there were more cartoons (there are a few) and more excerpts from contemporary Russian literature (is not the best art produced under political and economic repression?, or, perhaps, under the hopes of a better world?), but alas in the real world of scarce resources, one cannot, of course, have everything. Highly recommended.