Financial Mechanism of a Socialist Economy (on Poland's Example)

Financial system of a socialist economy. 1. The structure of the financial system. The socialist economy is composed of many units, which are economically independent, such as socialist (.e. state and collective) enterprises, private enterprises, individual consumers etc. This economy is managed in a planned manner, which imposed a certain limitation on the independence of the economic decisions taken by separate units. The instruments of limiting the freedom of economic decisions are of different types, as for example the general prescriptions of the civil law, the direct orders given by upper organizations (National Planning Office, Ministries etc.) and the indirect instruments stimulating directions of decisions according to the objectives of the general plan. The financial system is playing an important part among these instruments. All economic decisions in order to be effective - must be connected with the means sufficient to put them into execution. This means that the plan regulating the monetary revenues and expenditures of the independent economic units may be an efficient instrument of managing their economic activity. The planned regulation of monetary and expenditures is the main objective of socialist financial system.