Thu Sep 27 2001 at 17:59:00
Why planned economy?
s argue that we could achieve much more
if we planned our economy in a national and finally in
. They point out
already plan their functions in great detail and all we have to do is to apply the planning in larger scale. Thus we can be efficient thanks to
economics of scale
and we can avoid the negative consuquences of
boom and bust
, the disadvantages of
cyclic nature of capitalism
when planning our production. They say that competing capitalist companies produce the goods before they know what is needed on markets thus resulting wasted work through the
anarchy of production
One important notion is that in some areas of production the cost of duplicating a product is next to zero and then in planned economy these products could be given away for free instead of creating
. Especially this is the case with programming, music and information in general. Remember
How it works?
Well, it doesn't but...
It sounds very simple: You only have to know what people need and produce that.
Two kinds of plans are created: a
plan with undetailed
visions of future
plans with specific information of production. The production plans are handed out for factories and other producers and they have to fulfill the plans.
of prices familiar in capitalism and in other
those who lay down the plans have to find out what people need and want. They have to react on
and consciously give impulses for production through updated plans.
Also prices are defined by those who plan the whole
. Prices are basically equal to the costs of production but we may decide that there are some
goods that should be taxed to get some other benefits, like cumulating capital for
Why it doesn't work?
The answer here is very simple: No one cannot control that much information that there's involved in national or global economy as a whole. Think about yourself as a
: It certainly is troublesome enough if you have to say beforehand what you will need, say, in next six months. Multiply that by billions and think about the trouble controlling the whole
's wishes. And that's only the consumption part of it, then we should handle the data of production too..
Well, lessay we somehow manage to solve the problem above with some sort of
and very sophisticated program. Unfortunately people are not perfect.
was never realized (althought we have to admit that
have a very great deal with human being). It's in consumers'
to say they need as much everything as possible and on the other hand producers say they can produce only so few products... With this
the duty of planning is simply impossible.
also results the
of production because it will be easier to do and the planned economy lacks the
of market economies.
Is there something we can do?
Well, mild yes. Through planning/
we may soften the effects of
inherent in market economies. And already in
they introduced some incentives similar to market mechanism but then we cannot speak about the planned economy as such. However, the
may have a lot to give while creating more
. And IMO,
information should be free
- but however, this doesn't justify planning.
I like it!
This writeup has been cooled by:
Questions for those who don't like capitalism
Why equal distribution of income is good
The Regina Manifesto
Theory of surplus value
Depictions of the Purges
A brief history of economic thought
The early decline of Soviet Communism
Dream Log: November 17, 2002
The planning process
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