Transition Economies: Russia and China discusses the transition of these economies from communism to capitalism. Under communism, production was focused on meeting quantitative targets rather than quality or consumer demand. This led to shortages of some goods and overproduction of others. As these countries transitioned to capitalism, profit and market forces became priorities, incentivizing efficiency and responsiveness to consumer needs.

1. Transition Economies: Russia and
China

2. Main ideas
• Profit depends on consumer
demand, production efficiency, and product
quality and variety.
• Production costs, product quality, and product
mix became secondary considerations.
• If there is a shortage of a given product, the
price and profitability of that product will
rise, and producers will be motivated to
expand production.

3. Providing Examples
• Managers and workers often sacrificed
product quality, since they were being
awarded bonuses for meeting
quantitative, not qualitative, targets.
• Many products were unavailable or in short
supply while other products were
overproduced and sat for months or years in
warehouses.

4. Opinions
• Communism theoretically supports work ethics and
motivation within the computer industry by stratifying
personal, public, and Party interests. However, in
practice, the computer industry within Communist societies
suffers from laziness, greed, and unethical behavior.
Although Communism does not appear to support work
ethic and motivation, sectors of the computer industry do
appear to mimic the communal communities valued within
communism. Unfortunately, these sectors are sometimes
blocked from developing Communist states in the interest
of the Communist Party.
• http://www-cs-
faculty.stanford.edu/~eroberts/cs181/projects/communism
-computing-china/workethic.html