Page 17 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 5-20
THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 2, 2014, pp. 5-20

Command system causes over-centralisation of production in the level of enterprises and

unions. As it is known effectiveness of centralised management systems based on administrative

methods decreases relatively to number of managerial chains. By limiting number of these

managerial chains ministries and administrations tries to combine some type of goods in a one or

few enterprises, and included manufacturers of similar products into cooperation.

As a result economy became too monopolised. Goods in 1800s were produced only in a

one enterprise or union, more than 1100 enterprise were absolute monopolist in production of

certain type of goods in the beginning of 90s. 9 of 19 major type of Iron-pressing machines were

produced in one enterprise, 6 of them in two enterprise and 4 of them in three enterprise. 80 % of

fragile production combined in four enterprise and freezing camera production in three

enterprise. 75% of production of small-sized televisions focused on 3 enterprises [Radaeva V.V.,

Buzgalina A.V. 1995.p.370].

Even centralisation level in the beginning of XX century wasn’t as high as in the

processing industry in developed countries. As mentioned above various quality of machinery

products banned formulating of monopolist joints from ―downward‖. And this in its turn doesn’t

ban ―upward‖ monopolisation that is inherent for command economy system.

In western countries vertical integration system, combination system, and especially

diversification process of production destroys monopoly structures in many fields and

contributes competitive relations which stimulate scientific-technological development. The anti-

monopoly policy of government also is important in formulating and development of competitive

relations. At the same time stable monopoly structure of Soviet union was a key factor of

technological drawback from its developed competitors.

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