Socialist-oriented market economy

The socialist-oriented market economy (Vietnamese: Kinh tế thị trường theo định hướng xã hội chủ nghĩa) is the official name given to the current economic system in the Socialist Republic of Vietnam, as a product of the Đổi mới economic reforms, which led to the displacement of the centrally-planned economy with a market socialist system based on commodity production.



Vietnam's 6th Party Congress of the Communist Party initiated market-oriented reforms in 1986, known as Doi moi, which allowed for private ownership of enterprises engaged in commodity production alongside state and collectively run enterprises, and introduced market elements in the distribution of such goods and services.[1] The result is what Vietnam calls a socialist-oriented market economy, a new economic model intended to be a transitional phase in the development of a full socialist economy, with the goal of improving productive forces and developing a firm material base for the foundation of socialism.[2] The socialist-oriented market economy is a multi-sectoral commodity economy regulated by the market, but under state management and largely under state ownership. It is similar to the Chinese Socialist market economy in that many forms of ownership, including cooperative/collective enterprises, communal, private and state ownership models, co-exist in the economy, with the state sector playing a decisive role.[3] Government officials maintain that the socialist-oriented market economy is consistent with Marxist theory, and is the key for Vietnam to solve the relations between growth and development, while being able to operate and co-exist in the modern global market.[4] The socialist-oriented market model has aroused less controversy than the Chinese socialist market economy because private business plays a much smaller role in the Vietnamese system, with most the means of production remaining firmly under state control.[5], [6] The Communist Party of Vietnam has re-affirmed its commitment to the socialist economic orientation with its Doi Moi reforms.[7]

Theoretical basis

Proponents of socialist market economic systems defend their position from a Marxist perspective, stating that a planned socialist economy can only be brought about by first establishing the necessary comprehensive commodity market economy, letting it fully develop until it exhausts its historical stage and gradually transforms itself into a planned economy.[8] Proponents argue that the economic system of the former USSR and its satellite states attempted to go from a natural economy to a planned economy by decree, without passing through the necessary market economy phase of development.[9] Proponents of socialist-directed market economies distinguish themselves from market socialists by stating that market socialists believe that only through utilizing the market mechanism can socialism be achieved, and that market socialists believe planned economies are ineffective or undesirable.[10]

See also


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