ABSTRACT
This chapter examines the methods used to reach decisions in order to illustrate the similarities and differences when compared to Western approaches. Theoretically, the guidance being offered by economics as to the choice and development of the various systems is suspect and in practice the price system and investment criteria are hindering the large-scale introduction of the new machines. The use of any 'economic' criterion has to face the problem of imperfections in the mechanism of Soviet price formation. The criterion to evaluate the effectiveness of new technology is used in almost every area of investment appraisal, from the effectiveness of methods of nursery work to the determination of the best size of logging enterprise. In the early 1920s there was quite a vigorous debate on how to measure the effectiveness of new capital that included discussions on methods involving calculations similar to discounted cash flow techniques.
