url?sa=t&source=web&cd=1&ved=0CCYQFjAA&url=http://mercatus.org/sites/default/files/Holcombe_Cronyism_web

the Politburo and the needs of connected industries. 5
The absence of a functioning price system eliminated
the incentives that normally guide economic production
to direct scarce resources to their highest-valued uses.
Uncertainty about the quality and quantity of incoming
inputs led to widespread hoarding and underreporting of
inventories at every step of production and every level of
employment, which only exacerbated the problem.
Along each link in the chain of command, the body
or department attempted to squeeze as many resources
from its subordinates as possible while returning as few
supplies to its supervisors as possible. The price of not
meeting a yearly quota could be excruciatingly high; an
unfortunate manager who was unable to produce the
required output could be demoted, sent to a work camp,
or even sentenced to death for his “incompetence.”
Without a way to properly assess supply and demand,
state managers resorted to alternative, extralegal methods
to game the system in order to procure the resources
they needed.
One way for public officials to procure required
resources and avoid retribution was to gain influence
with high-level sources of state power, and Soviet records
detail several instances of political favoritism trumping
economic intuition in economic planning. For instance, a
1931 crisis in grain allocation resulted in burgeoning civil
unrest throughout the agricultural regions. 6 Although the
Politburo was resolute in its dedication to the ratified plan
regardless of the changes in conditions, regional leaders
felt pressure from the farmers they oversaw—who were
becoming weak and unruly because the short-sighted,
export-driven agricultural policy with which they were
22 LIBERALISM AND CRONYISM