ABSTRACT
This conclusion presents some closing thoughts on the concepts covered in the preceding chapters of this book. The book looks at directive production planning and compulsory administrative allocation of outputs and nonfactor inputs, argued that industrial planning in China has already largely lost the ability to affect directly the production and distribution of industrial goods in the short run. It explores the static aspects of the two-tier system. The book argues that despite numerous caveats and qualifications, the model’s assumptions are by and large defensible. It avoids establishing any fixed criteria for “dynamic” markets. The book suggests that the economic incentives and tendencies inherent in the two-tier system generate strong pressures for expansion in the share of market allocation and reduction in the share of planning. It reviews contrasting views of the market mechanism, including the neoclassical perspective and the Austrian approach.
