Why planned economy?

Socialists argue that we could achieve much more efficient production if we planned our economy in a national and finally in global scale. They point out private companies 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 artificial scarcity familiar in capitalism. Especially this is the case with programming, music and information in general. Remember Napster?

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 long term plan with undetailed visions of future and short term plans with specific information of production. The production plans are handed out for factories and other producers and they have to fulfill the plans.
Instead of market mechanism of prices familiar in capitalism and in other market economies those who lay down the plans have to find out what people need and want. They have to react on consumption and consciously give impulses for production through updated plans.
Also prices are defined by those who plan the whole economy. Prices are basically equal to the costs of production but we may decide that there are some luxury goods that should be taxed to get some other benefits, like cumulating capital for investments.

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 consumer: 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 mankind'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 supercomputer and very sophisticated program. Unfortunately people are not perfect. Homo Sovietus was never realized (althought we have to admit that education and culture have a very great deal with human being). It's in consumers' interest 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 false information the duty of planning is simply impossible.
People's unperfectness also results the poor quality of production because it will be easier to do and the planned economy lacks the incentives of market economies.

Is there something we can do?

Well, mild yes. Through planning/taxation we may soften the effects of fluctuation inherent in market economies. And already in Soviets they introduced some incentives similar to market mechanism but then we cannot speak about the planned economy as such. However, the mixed economy may have a lot to give while creating more equal society. And IMO, information should be free - but however, this doesn't justify planning.

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