Soviet planning is often associated with full employment, which many scholars consider one of its major achievements. In the early 1970s, P. D. Wiles concluded his witty comparative assessment of Soviet and American employment trends by vouching for ‘the superiority of the Soviet system, even when there is full employment in the USA’.1 This conclusion, however, ignored the income and welfare implications of employment. A more comprehensive assessment of full employment and its economic effects cannot, on the other hand, avoid the question of whether increases in employment are the result of conscious policies or a by-product of inefficient planning. D. Granick has argued in favour of the first hypothesis, while P. Hanson, drawing on some aspects of Kornai’s work, has provided arguments for the second.2 The merit of Granick’s analysis is to link employment with the wage policy; Hanson, on the other hand, draws attention to the effects of low labour productivity on the demand for labour. Both approaches are stimulating, but neither presents the rationale of employment policy as seen by Soviet planners. This is the purpose of this work.
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