In a command economy like the Soviet Union, where central planners allocate goods rather than allowing market forces to determine prices, the scarcity of a vital resource such as oil presents unique challenges.
When oil becomes more scarce, the central planners would likely recognize this change in availability. However, because there are no market-driven prices to signal this scarcity, they must rely on their assessments and resource allocation strategies. This could lead to several possible outcomes:
- Rationing: The government may implement rationing to control the distribution of oil, ensuring that all sectors, such as transportation, industry, and households, receive a fair share despite the reduced availability.
- Reallocation: The central planners might prioritize certain sectors that are deemed essential for national interests or economic stability. For instance, they may allocate more oil to military or strategic industries while potentially limiting availability to less critical sectors.
- Production Adjustments: Planners could increase efforts to find alternative sources of energy or incentivize search for new oil reserves. However, without the price signals that a market economy would provide, these adjustments can often be slow and less efficient.
- Potential for Black Markets: If the allocation does not meet actual demand, it may lead to the emergence of black markets, where oil is traded illegally at high prices, reflecting the true scarcity of the resource.
Overall, while a command economy aims for a stable and equitable distribution of resources, the absence of prices complicates responses to changes in scarcity, often leading to inefficiencies and misallocation in the long run.