ABSTRACT
In contrast to the Soviet Union and the East European countries, China under Mao Tse Tung, North Korea, Vietnam, and Cuba offer examples of regimes that have placed a much greater emphasis on moral incentives and relied upon a more egalitarian distribution of income. The influence of Che Guevara's ideas on moral incentives is still strong in Cuba, even though it has been a quarter of a century since he left the island. Che argued that moral incentives should be given primacy over material incentives and that the finances of the state enterprises should be part of the state budget. The use of moral incentives in combination with a relatively egalitarian system for the distribution of goods and services has prevented the development in most of these countries of the kind of sharp income differentiation and social stratification that is found in the Soviet Union and Eastern Europe.
