ABSTRACT
During the last two to three decades, virtually every socialist country has become aware of the need for economic reform because of marked deterioration in its economic efficiency. There have been numerous attempts, in most cases without success, to institute economic decentralization. The deterioration of investment efficiency has been largely due to mismanagement. Professor Brus has a point when he argues that there is no simple link between decentralization and income inequality in the socialist countries. In the socialist countries the Marxian distribution principle "from each according to his ability, to each according to his labor" is the theoretical base for differentiation of earnings. In all Western and Eastern European countries there has been a decline in some occupational wage differentials. Somewhat more complicated is the link between strength, talent, etc., and higher pay. A genius in mathematics is going to be a mathematician, irrespective of monetary rewards.
