Specialists who have followed the development of mathematical economics in the USSR recognize that it is now at a transitional stage. Two or three decades ago the work of Soviet mathematical economists tended to be theoretical and devoted to exploring the potential applications of mathematical methods in the analysis of the planned socialist economy. Gradually experience in the use of quantitative techniques was obtained through investigation of concrete planning problems. This led to the reevaluation of many old concepts and the elaboration of new theoretical positions.
From this analysis of the socialist economy the theory of the ' optimal functioning socialist economy' (OFSE) emerged. Scholars such as Nobel Prize Laureate L. Kantorovich, as well as V. Novozhilov, V. Nemchinov, N. Fedorenko and A. Aganbegyan have made major contributions in this area. The extensive Soviet literature on the OFSE encompasses both theoretical works of a mathematical nature and empirical studies of the economic problems of enterprises, associations and planning bodies. Soviet mathematical economists believe that the OFSE should not be viewed as an abstract theoretical construction, but rather as the framework toward which the existing economy in the USSR will evolve.*
The author of the book under review, N. Fedorenko, is head of the Central Economic--Mathematical Institute of the Academy of Sciences USSR and is well known for his contributions to the field of OFSE. N. Fedorenko recognizes the success of the socialist economy and the historic significance of the experience it has accumulated in economic management. Nevertheless he uncovers undesirable economic trends and unresolved problems and then formulates means of resolving them. In the book many issues concerning the planning and management of the contemporary Soviet economy are discussed and analyzed within the framework of the OFSE.
The book is divided into ten chapters. The first four are devoted to mathematical economic methods and models and the theory of optimal economic planning. The remainder are concerned with the actual functioning of the economy.
In the first chapter the author evaluates techniques of national economic planning derived from the theory of optimal functioning. Special attention is paid to the method of goal-programming, which provides a framework for the integrated solution of problems associated with the scientific --technological, economic and social development of the country.
N. Fedorenko believes that the important role of five year plans should be maintained in planning practice, but he calls for greater attention to long range issues. The second chapter surveys mathematical economic methods of projecting socio-*An English-language introduction to the OFSE is given in N. Fedorenko Optimal Functioning System for a Socialist Economy, Moscow, Progress Publishers, 1974 (Editor).