A Theoretical Consideration of the Socialist Market Economy

The recent economic experience of countries such as China, Vietnam, Laos, etc., has invoked some interest in the economic system in these countries. This economic system which is often characterised as the socialist market economy is first conceptually distinguished from a centrally planned socialist economy as well as from a market socialist economy. Then a simple macroeconomic framework of a stylised socialist market economy is set out and its principal properties are highlighted. The paper concludes with a brief examination of the political economy of the socialist market economy.