Subsidy madness
Director's column
27 Sep 2024
Written By Andrew Montford
The essence of this post previously appeared as a thread on X. It did rather well, so here is a long-form write up.
During the communist era, the Polish government decided to deal with a shortage of windows – or, more precisely, a shortage of glass with which to fill them – by setting manufacturers a target. For every tonne of glass they produced above the target, there would be rich rewards.
The result was not what the commissars expected. The supply of windows remained broadly unchanged, but the glass they held was much thicker than before. Indeed, it became so thick that it was barely possible to see through it.
Realising their mistake, a new target was set, this time based on the area of glass delivered, with the inevitable result that thenceforwards the glass in new Polish windows was paper thin and broke at the slightest touch.
Tales of useless products in command economies are legion, but it is not just the quality of goods that falls short; the quantities are also likely to be wrong too – with bureaucrats delivering vast overproduction of some goods and failing to deliver an adequate supply of many others. The Soviet Union was the largest manufacturer of shoes in the world, but most remained unsold, and were usually poorly made too. Russians would queue for days to get hold of good quality Western alternatives.
